Table 11.1 -Refer to Table 11.1.The Hypothetical Information in the Table Shows

question 177

Multiple Choice

Table 11.1
-Refer to Table 11.1.The hypothetical information in the table shows what the values for real GDP and the price level will be in 2020 if the Bank of Canada does not use monetary policy.Which of the following policies makes sense if the Bank of Canada wants to keep real GDP at its potential level in 2020?

• A)The Bank of Canada should sell government of Canada securities.
• B)The Bank should lower the target for the overnight interest rate.
• C)The Bank of Canada should pursue contractionary policy.
• D)The Bank of Canada should lower capital gains taxes.
• E)The Bank of Canada should extend fewer loans to commercial banks.

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Definitions:

Positive Reinforcement

A process in operant conditioning where a behavior is followed by a rewarding stimulus, increasing the likelihood of that behavior occurring again.

Cognitive Schema

Mental structures that an individual uses to organize knowledge and guide cognitive processes and behavior.

Stereotype

A common yet rigid and simplistic representation or notion of a specific kind of individual or object.

Fundamental Attribution Error

The tendency for observers to underestimate situational influences and overestimate personal dispositional factors when interpreting others' behavior.