According to Liquidity-Preference Theory, What Action Taken by the Bank

question 24

Multiple Choice

According to liquidity-preference theory, what action taken by the Bank of Canada would shift the money-supply curve?

• A) if the Bank of Canada engaged in arbitrage
• B) if the Bank of Canada changed the inflation rate
• C) if the Bank of Canada changed the exchange rate
• D) if the Bank of Canada engaged in open-market transactions

---

Definitions:

Officers

In the context of corporations, officers are high-ranking individuals appointed to manage the day-to-day operations and make executive decisions on behalf of the company.

Shareholders

Individuals or entities that own shares in a corporation, thus having a stake in the company's equity and potentially influencing its governance.

Rationalizing the Decision

The process of providing logical reasons to justify a decision or course of action.

Utilitarian Approach

An ethical philosophy suggesting that the best action is the one that maximizes utility, often defined as maximizing happiness and reducing suffering.