How Does a Monetary Injection by the Bank of Canada

question 129

Multiple Choice

How does a monetary injection by the Bank of Canada affect interest rates and aggregate demand?

• A) It increases interest rates and increases aggregate demand.
• B) It increases interest rates and decreases aggregate demand.
• C) It decreases interest rates and decreases aggregate demand.
• D) It decreases interest rates and increases aggregate demand.

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Definitions:

Positive-feedback

A biological mechanism whereby a stimulus intensifies the production of a product, leading to an amplification effect in the system.

Lipid-soluble Hormones

Hormones that can pass through the lipid bilayer of cell membranes and are usually transported in the bloodstream bound to carrier proteins.

Cytoplasm

The jelly-like substance within a cell that contains all organelles and cell parts, excluding the nucleus.

Plasma Membrane

A lipid bilayer that surrounds a cell, controlling the movement of substances in and out of the cell.