A Former Governor of the Bank of Canada Argued That

question 28

Multiple Choice

A former Governor of the Bank of Canada argued that high interest rates tend to accompany high inflation because inflation

• A)reduces banks' profits who then respond by lowering their lending rates.
• B)erodes the value of the dollar and therefore lenders need to be compensated through higher interest rates.
• C)causes the Canadian dollar to appreciate which again fuels inflation even more.
• D)lowers short term interest rates and acts as an incentive to borrow money.
• E)increases housing prices so younger Canadians are made worse off.

---

Definitions:

Mental Age

A measure of an individual's cognitive ability compared to the average cognitive ability for their chronological age.

Heredity

The genetic transmission of characteristics from parents to offspring, determining certain physical or behavioral traits.

Mental Age

A measure of an individual's mental aptitude based on the average abilities of people at a certain chronological age, irrespective of the person's actual chronological age.

Chronological Age

Chronological age is the actual age of an individual measured in years from the date of their birth to the present time.