When the Financial Crisis Started in August 2007, Inflation Was

question 34

Multiple Choice

When the financial crisis started in August 2007, inflation was rising and the Bank of Canada began an aggressive easing lowering of the overnight rate, which indicated that ________.

• A) the Bank of Canada pursued an autonomous monetary policy tightening
• B) the Bank of Canada pursued an autonomous monetary policy easing
• C) the Bank of Canada had an automatic negative response to inflation based on the Taylor rule
• D) the Bank of Canada had an automatic positive response to inflation based on the Taylor rule

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Definitions:

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured by gross domestic product (GDP).

Randomized Control Trials

Experimental studies where subjects are randomly assigned to a treatment group or a control group to measure the effect of interventions.

Global Aid Programs

International efforts and initiatives aimed at providing financial, technical, or humanitarian assistance to countries and communities in need.

Government Stability

The degree to which a government is consistent in its policies, effective in its governance, and able to maintain order.