If the Economy Is Experiencing an Undesired Inflationary Gap,the Bank

question 45

Multiple Choice

If the economy is experiencing an undesired inflationary gap,the Bank of Canada could

• A)increase the supply of money,lowering interest rates,which would shift the AD curve inward.
• B)decrease the demand for money,lowering interest rates,which would shift the AD curve outward.
• C)decrease the supply of money,raising interest rates,which would shift the AD curve inward.
• D)increase the supply of money,lowering interest rates,which would shift the AD curve outward.
• E)shift the investment demand curve to the right by lowering interest rates,which would shift the AD curve outward.

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