Consider a Central Bank That Chooses to Implement Its Monetary

question 73

Multiple Choice

Consider a central bank that chooses to implement its monetary policy by expanding the money supply by a fixed percentage amount in every year.One important disadvantage with this approach to monetary policy is that it may

• A)lead to sustained inflation.
• B)be destabilizing if the demand for money is unstable.
• C)lead to stable growth of national income.
• D)be inconsistent with the Bank of Canada Act.
• E)create a recessionary output gap.

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Definitions:

Oxygen

A chemical element with symbol O and atomic number 8, essential for respiration in living organisms and combustion processes.

D-Block Elements

Elements occupying the d-block of the periodic table, known for their transition metals characteristic, including iron, copper, and gold.

Carbon

A chemical element with symbol C and atomic number 6, essential to all known living systems and the basis for organic chemistry.

Glaciers Melt

The process by which glaciers lose their ice mass to the surrounding water and air, contributing to sea-level rise and changes in global water cycles.