If the Bank of Canada Is Concerned with Inflation It

question 44

Multiple Choice

If the Bank of Canada is concerned with inflation it will _______ the overnight loans rate to _______.

• A)raise; increase aggregate demand
• B)raise; increase potential GDP
• C)lower; increase aggregate demand
• D)raise; decrease aggregate demand
• E)lower; decrease aggregate demand

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Definitions:

Fair Value Measurement

This is the estimation of the price at which an asset or liability could be exchanged in a current transaction between willing parties, other than in a liquidation sale.

Financial Instruments

Contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

FASB

The Financial Accounting Standards Board, an organization responsible for setting and improving financial accounting and reporting standards in the U.S.

IASB

The International Accounting Standards Board, responsible for developing and enforcing the International Financial Reporting Standards (IFRS).