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Exhibit 14-6 -Refer to the Graph in the Exhibit.Suppose the Bank of Exhibit.Suppose

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Exhibit 14-6
Exhibit 14-6    -Refer to the graph in the exhibit.Suppose the Bank of Canada is targeting the money supply and the money demand shifts from Dm to Dm′.How should the Bank of Canada react?   A)  The Bank of Canada should do nothing and the interest rate will rise to i′.  B)  The Bank of Canada should do nothing and the interest rate will settle at i.  C)  The Bank of Canada should decrease the money supply to restore its target of i.  D)  The Bank of Canada should increase the money supply to restore its target of i.
-Refer to the graph in the exhibit.Suppose the Bank of Canada is targeting the money supply and the money demand shifts from Dm to Dm′.How should the Bank of Canada react?  

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Definitions:

Lower-Level Needs

Refers to the foundational physiological and safety needs in Maslow's hierarchy that must be satisfied before an individual can focus on higher-level psychological needs.

Primary Mechanism

The main or initial process by which a specific task or function is performed or facilitated.

Motivating People

The process of stimulating individuals to take action that leads to achieving their personal and professional goals.

Flexible Work Schedule

An arrangement that allows employees to vary their arrival and departure times, as well as work location, to accommodate personal needs and preferences.

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