If the Economy Is Experiencing an Undesired Inflationary Gap,the Bank

question 45

Multiple Choice

If the economy is experiencing an undesired inflationary gap,the Bank of Canada could

• A)increase the supply of money,lowering interest rates,which would shift the AD curve inward.
• B)decrease the demand for money,lowering interest rates,which would shift the AD curve outward.
• C)decrease the supply of money,raising interest rates,which would shift the AD curve inward.
• D)increase the supply of money,lowering interest rates,which would shift the AD curve outward.
• E)shift the investment demand curve to the right by lowering interest rates,which would shift the AD curve outward.

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Definitions:

Inventory Valuation

The method used by businesses to assess the value of their inventory, taking into account the cost of acquiring or producing the goods and any market changes.

Profitability of Joint Products

The assessment of earnings from products that are produced simultaneously from the same process and cannot be distinguished cost-wise until a certain point of production.

Qualitative Factors

Qualitative factors are non-numeric variables or considerations that affect decision-making, such as company reputation or customer satisfaction.

Buying

The process of acquiring goods or services, typically for business operations or personal use.