Figure 131 Alt Text for Figure 13

question 8

Multiple Choice

Figure 13.1 Alt text for Figure 13.1: In figure 13.1, a short-run Phillips curve.
Long description for Figure 13.1: The x-axis is labelled, unemployment rate percent, and the y-axis is labelled, inflation rate percent per year.A straight line labelled, Philips curve, begins at the top left corner and slopes down to the end of the x-axis.Point A is plotted half way along line Philips curve.Point B is plotted to the right of point A and point C is plotted is to the left of point A.Point D is plotted above this line, in the left center of the quadrant.Point E is plotted below this line, directly below point A.
-Refer to Figure 13.1.Suppose that the economy is currently at point A, and the unemployment rate at A is the natural rate.What policy would the Bank of Canada pursue if it wanted the economy to move to point C in the long run?

• A)buy government securities
• B)sell government securities
• C)lower the discount rate
• D)increase the money supply
• E)No policy will move the economy to point C in the long run.

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