Compared to the 1970s, How Did the Canadian Short-Run Phillips

question 28

Multiple Choice

Compared to the 1970s, how did the Canadian short-run Phillips curve move in recent years and why?

• A)It has moved further right, as inflation expectations have risen.
• B)It has further right, as inflation expectations have fallen.
• C)It has further left, as inflation expectations have risen.
• D)It has further left, as inflation expectations have fallen.

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Definitions:

Retired Bonds

Bonds that have been paid off or bought back by the issuer before or at maturity, effectively removing them from existence and relieving the issuer of further obligations.

Effective-Interest Method

A method of calculating the amortized cost of a bond and the amount of interest expense over time, by applying a constant interest rate to the carrying value of the bond.

Straight-Line Method

A way of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Premium Amortization

The gradual reduction of the premium paid above the face value of a bond, allocated over the life of the bond.