If the Bank of Canada Keeps the Real Interest Rate

question 89

Multiple Choice

If the Bank of Canada keeps the real interest rate constant,an economic shock such as a housing market crash would cause the ________,and the output gap would ________.

• A) MP curve to shift up; increase
• B) MP curve to shift down; decrease
• C) IS curve to shift to the left; decrease
• D) IS curve to shift to the right; increase

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