Suppose the Economy Is in a Recession

question 11

Multiple Choice

Suppose the economy is in a recession.Which of the following policies would is most likely to be supported by a person who favours an active approach to policy?  

• A) The economy should be left to cure itself without government intervention. 
• B) The Bank of Canada should sell Canadian government securities in its open-market operations. 
• C) The Bank of Canada should raise the overnight loans rate. 
• D) Government purchases should increase.

---

Definitions:

Phenol

An aromatic organic compound with the formula C6H5OH, used as an antiseptic and a raw material in the synthesis of plastics.

Molecular Formula

A notation used in chemistry to show the types and numbers of atoms combined in a single molecule of a chemical compound.

Solute Dissolves

The process by which a solute integrates into a solvent, forming a solution, typically at a molecular level.

Dissolution

The process by which a solid, liquid, or gas forms a solution in a solvent, essentially becoming incorporated into the solvent.