A Decrease in the Inflation Target by the Central Bank

question 92

Multiple Choice

A decrease in the inflation target by the central bank would:

• A) have no impact on the positioning of the dynamic aggregate demand curve.
• B) cause the dynamic aggregate demand curve to shift to the left.
• C) cause the dynamic aggregate demand curve to shift to the right.
• D) be reflected by a movement down and along the existing dynamic aggregate demand curve.

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Definitions:

Rogers Wireless

A major Canadian telecommunications and media company known for providing wireless communications services.

Bell Mobility

A Canadian telecommunications and wireless service provider that offers a range of mobile services, including voice, text, and data communications.

Telus Mobility

A Canadian wireless network operator and a division of Telus Communications offering mobile voice, text, and data services.

Free Market

An economic system in which prices are determined by unrestricted competition between privately owned businesses.