Of the Three Phases Involved in the Elimination of a Sustained

question 99

Multiple Choice

Of the three phases involved in the elimination of a sustained inflation in Canada,the second phase is characterized by

• A)the Bank of Canada pursuing an expansionary monetary policy.
• B)stagflation with falling output and continuing inflation.
• C)the Bank of Canada increasing the rate of monetary expansion.
• D)aggregate output being returned to potential output.
• E)increased inflation with rising output and falling unemployment.

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Definitions:

Comparative Advantage

The knack of entities, whether they are people, companies, or countries, to bring forth goods or services at opportunity costs that undercut those of competitors.

Opportunity Costs

Opportunity Costs represent the benefits that are foregone by choosing one option over an alternative one.

Specialization

The focus by an individual, firm, or country on producing a limited range of goods or services, often to improve efficiency and productivity.