From an Initial Long-Run Macroeconomic Equilibrium, If the Bank of Canada

question 261

Multiple Choice

From an initial long-run macroeconomic equilibrium, if the Bank of Canada anticipated that next year aggregate demand would grow significantly faster than long-run aggregate supply, then the Bank of Canada would most likely

• A)increase income tax rates.
• B)decrease income tax rates.
• C)increase interest rates.
• D)decrease interest rates.
• E)decrease the operating band for the bank rate.