Beginning from a Position of Long- Run Equilibrium, a Contractionary

question 18

Multiple Choice

Beginning from a position of long- run equilibrium, a contractionary monetary policy by the Bank of Canada causes:

• A)an increase in potential output.
• B)aggregate demand for goods and services to exceed potential output.
• C)a fall in most market interest rates.
• D)an increase in the general price level.
• E)potential output to exceed aggregate demand for goods and services.

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