If the Operating Target of the Bank of Canada Is

question 86

Multiple Choice

If the operating target of the Bank of Canada is 4.5 percent then the bank rate is ________.

• A) 4.75 percent
• B) 5.25 percent
• C) 4.25 percent
• D) 4.5 percent

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Definitions:

Aggregate Expenditure Line

A graphical representation that shows the total amount of spending in an economy (consumption, investment, government spending, and net exports) at various levels of income.

Marginal Propensity to Consume

The fraction of any increase in disposable income spent on consumption, highlighting how consumption changes as income changes.

Price Level

Price level indicates the average of current prices across the entire spectrum of goods and services produced in the economy, often compared over time to assess inflation or deflation.

Aggregate Demand Curve

The total demand curve illustrates the overall volume of goods and services the economy requires at various price points.