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:

Price Discrimination

A practice whereby a seller charges different consumers different prices for the same product or service.

Patents

Legal rights granted to inventors, giving them exclusive rights to make, use, or sell their inventions for a certain period.

Diseconomies of Scale

A situation in which a firm's production costs increase as it produces more, leading to less efficiency.

Essential Resource

A resource deemed vital for the survival of an organism, community, or operation, whose absence can lead to severe negative impacts.