Suppose Canadian Real GDP Is Equal to Potential GDP

question 115

Multiple Choice

Suppose Canadian real GDP is equal to potential GDP.A significant and sustained appreciation of the Canadian dollar would likely lead the Bank to engage in an expansionary monetary policy if the Bank's policy experts traced the cause of the appreciation to

• A)a decrease in the overnight lending rate.
• B)an increase in the desire of non-residents to purchase Canadian financial assets.
• C)an increase in the desire of non-residents to purchase more Canadian goods and services.
• D)a reduction in Canada's core inflation rate.
• E)a recession in Canada.