Suppose Canadian Real GDP Is Equal to Potential GDP

question 104

Multiple Choice

Suppose Canadian real GDP is equal to potential GDP.A significant and sustained appreciation of the Canadian dollar would likely lead the Bank to engage in a contractionary monetary policy if the Bank's policy experts traced the cause of the appreciation to

• A)a decrease in the overnight lending rate.
• B)an increase in the desire of non-residents to purchase Canadian financial assets.
• C)an increase in the desire of non-residents to purchase more Canadian goods and services.
• D)a reduction in Canada's core inflation rate.
• E)a recession in Canada.

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Definitions:

Personal Income

The total earnings received by an individual from all sources before taxes, including wages, dividends, and interest payments.

Property Income

Earnings derived from property ownership, such as rents, interest on loans, and dividends from investments.

Personal Income

The total income received by individuals, including wages, salaries, government benefits, and income from investments.

Wage Supplements

Additional financial benefits provided to employees on top of their regular wages, which could include bonuses, health insurance, or retirement benefits.