Which of the Following Provides the Best Example of How

question 25

Multiple Choice

Which of the following provides the best example of how inflation targeting by the Bank of Canada helps to stabilize the economy?

• A)Firms and households are aware of the announced inflation target and adjust their behaviour so as to maintain this level of actual inflation.
• B)When a recessionary gap reduces the rate of inflation (below the target level)the Bank of Canada will implement an expansionary monetary policy,which helps to close the gap.
• C)When the actual inflation rate falls below the targeted level of inflation,then commercial banks automatically increase deposit creation.
• D)When an output gap opens in the economy,the inflationary target adjusts to close the gap.
• E)When an output gap opens in the economy,the Bank of Canada chooses the inflation target appropriate for closing the gap.

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Definitions:

Elevated Estrogen

A condition where there are higher than normal levels of estrogen hormones in the body, which can affect both men and women in various ways.

Feminized

Making something more characteristic of or associated with women or considered traditionally female attributes.

Intermediate

Refers to a mid-level or middle stage in a process, positioned between two extremes or levels.

Genetic Male

A term used to describe an individual whose chromosomes are XY, typically leading to male biological characteristics.