In the Long Run, If the Bank of Canada Decreases

question 12

Multiple Choice

In the long run, if the Bank of Canada decreases the rate at which it increases the money supply, what will happen to inflation and unemployment?

• A) Inflation and unemployment will be higher.
• B) Inflation will be higher and unemployment will be lower.
• C) Inflation will be lower and unemployment will be higher.
• D) Inflation will be lower and unemployment will stay the same.

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Definitions:

Cash Cycle

The period between the initial investment in inventory and receiving cash from the sale of goods or services, reflecting a company's efficiency and management of working capital.

Fixed Assets

Long-term tangible assets used in the operation of a business, such as buildings, machinery, and equipment, not easily converted into cash.

Source of Cash

Any activity or operation within a business that generates cash inflow.

Inventory Acquisition

The process of obtaining and adding goods or materials to a company's stock for further sale or use.