Suppose the Economy Is Experiencing an Inflationary Gap

question 97

Multiple Choice

Suppose the economy is experiencing an inflationary gap.Which of the following describes a likely policy response by the Bank of Canada?

• A)A contractionary monetary policy which leads to a lower interest rate,reduced investment demand,and a shift to the left of the AD curve.
• B)An expansionary monetary policy which leads to an increase in investment demand,and a shift to the right of the AD curve.
• C)An expansionary monetary policy which leads to a decrease in investment demand,and a shift to the left of the AD curve.
• D)A contractionary monetary policy which leads to an increase in investment demand,and a shift to the right of the AD curve.
• E)A contractionary monetary policy which leads to a reduction in investment demand,and a shift to the left of the AD curve.

---

Definitions:

Gadd Severity Index

A scoring system used to assess the severity of an individual's criminal history or offenses.

True Population Proportion

The actual fraction or percentage of a specific characteristic within an entire population.

Vitamin D Supplements

Products taken to increase the amount of Vitamin D in the body, which is important for maintaining bone health.

Alternative Hypotheses

Hypotheses that suggest there is a statistically significant effect, relationship, or difference between two or more variables in a population.