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:

UCC

United States commercial ventures are directed by the broad legal standards set within the Uniform Commercial Code.

Shipment Contract

A type of contract specifying that the seller is obligated to send the goods to the buyer, but the risk of loss passes to the buyer when the goods are duly delivered to the carrier.

Tender Of Delivery

A requirement that a seller/lessor have and hold conforming goods at the disposal of the buyer/lessee and give the buyer/lessee reasonable notification to enable him or her to take delivery.

Risk Of Loss

A provision in contracts determining who bears the risk for damage to goods after purchase but before delivery.