The diagrams below illustrate two alternative approaches to implementing monetary policy.The economy begins in monetary equilibrium with the interest rate equal to 2% and the money supply equal to 
. 
FIGURE 28-1
-Refer to Figure 28-1.If the Bank of Canada pursues a(n) ________ monetary policy and raises the target interest rate from 2% to 3%,then the quantity of money demanded will ________.
Definitions:
Childbirth
The process of delivering a baby from the womb to the external world, which can involve various medical interventions and methods of pain relief.
Substantia Gelatinosa
A region in the dorsal horn of the spinal cord involved in the processing of pain and temperature information coming from the body to the brain.
Gate Control Theory
A theory suggesting that psychological factors play a role in the perception of pain and that pain signals can be blocked or passed through neural "gates" in the spinal cord.
Spinal Cord
A long, thin bundle of nerves that extends from the brain down the back, transmitting signals between the brain and the rest of the body.
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