In Which of the Following Situations Would the Bank of Canada

question 184

Multiple Choice

In which of the following situations would the Bank of Canada conduct contractionary monetary policy?

• A)The Bank of Canada believes that aggregate demand is growing too slowly to keep up with potential GDP.
• B)The Bank of Canada fears that unemployment is climbing above the natural rate.
• C)The Bank of Canada is concerned that aggregate demand may continue to exceed the growth in potential GDP.
• D)The Bank of Canada is worried that deflation will become a problem.
• E)The Bank of Canada is concerned that the exchange is below its operating band.

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