If the Bank of Canada Is Concerned with Recession It

question 15

Multiple Choice

If the Bank of Canada is concerned with recession it will ________ the overnight loans rate to ________.

• A)raise; increase aggregate demand
• B)lower; increase aggregate demand
• C)raise; decrease aggregate demand
• D)lower; decrease aggregate demand
• E)lower; increase potential GDP

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Definitions:

Production Function

An equation that describes the maximum amount of output that can be obtained from a given number of inputs.

Output

The total amount of goods or services produced by a company, country, or economic system.

Returns To Scale

The rate at which output changes in response to a proportional change in all inputs used in the production process.

Production Function

A function that outlines how inputs are transformed into outputs in the production process, often used to analyze efficiency and productivity.