In 2007 and 2008,Canada Was Affected by the Global Financial

question 48

Multiple Choice

In 2007 and 2008,Canada was affected by the global financial crisis that had begun with the U.S.housing collapse.What actions did the Bank of Canada take between the fall of 2007 and the end of 2008 in an attempt to maintain the level of economic activity in Canada? The Bank of Canada

• A)maintained its target for the overnight rate and made short-term loans to financial institutions more accessible.
• B)implemented a large fiscal stimulus program to counteract the sharp rise in interest rates that had occurred.
• C)reduced its target for the overnight rate by over 3.5 percentage points and made short-term loans to financial institutions more accessible.
• D)reduced its target for the overnight rate by over 5 percentage points and purchased "toxic" assets from Canadian commercial banks.
• E)purchased "toxic" assets from Canadian commercial banks and implemented a large fiscal stimulus program.

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Definitions:

Market Equilibrium Wage

The wage rate at which the quantity of labor supplied equals the quantity of labor demanded in a given labor market.

Widget Industry

A fictional or generic term often used to represent any sector of manufacturing, without specifying a particular type of product.

Nonunionized Labor Market

A labor market that is composed of workers and employers where no labor unions are present to represent the workers' interests.

Minimum Wage

The minimum wage is the lowest legal wage that employers can pay their workers, set by government policy to ensure a minimum standard of living for workers.