If the Economy Is Experiencing an Undesired Inflationary Gap, the Bank

question 96

Multiple Choice

If the economy is experiencing an undesired inflationary gap, the Bank of Canada could

• A)decrease the demand for money, lowering interest rates, which would shift the AD curve outward.
• B)decrease the supply of money, raising interest rates, which would shift the AD curve inward.
• C)shift the investment demand curve to the right by lowering interest rates, which would shift the AD curve outward.
• D)increase the supply of money, lowering interest rates, which would shift the AD curve outward.
• E)increase the supply of money, lowering interest rates, which would shift the AD curve inward.

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