Suppose There Is an Inflationary Gap,and the Bank of Canada

question 81

Multiple Choice

Suppose there is an inflationary gap,and the Bank of Canada does not respond in any way to change its monetary policy.This scenario will lead to

• A)an increase in wages and an upward shift of the AS curve.
• B)a wage-price spiral.
• C)a permanent decrease in output.
• D)the emergence of a recessionary gap.
• E)reduced transactions demand for money,an increase in the price of bonds,and a lower rate of interest.

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Definitions:

Breast Development

The process involving physical changes in the breast tissue, usually starting during puberty, as a part of sexual maturation in females and sometimes males.

Elevated Body Mass Index

A measure indicating high body weight in relation to height, which may signify overweight or obesity.

Primary Sexual Development

The development of the reproductive organs and structures that occur during puberty.

Secondary Sexual Development

The physical changes that occur during puberty, aside from the reproductive organs, such as development of breasts in females and deepening of the voice in males.