If the Bank of Canada Chooses to Prevent Any Change

question 145

Multiple Choice

If the Bank of Canada chooses to prevent any change in the exchange rate when government spending increases, which of the following is most likely to happen?

• A)crowding out effects
• B)no crowding out effects
• C)no increase in the demand for goods and services
• D)a decrease in aggregate demand

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Definitions:

Mania

A mental state characterized by extremely high energy levels, euphoria, hyperactivity, and a decreased need for sleep, often seen in bipolar disorder.

Euphoria

A feeling or state of intense excitement and happiness.

Impulsive Behavior

Actions performed suddenly without apparent thought, often as a response to immediate stimuli.

DSM

Short for Diagnostic and Statistical Manual of Mental Disorders, a handbook used by healthcare professionals as the authoritative guide to the diagnosis of mental disorders.