Figure 1110 Alt Text for Figure 11

question 144

Multiple Choice

Figure 11.10 Alt text for Figure 11.10: In figure 11.10, a graph comparing real GDP and price level.
Long description for Figure 11.10: The x-axis is labelled, real GDP (trillions of 2007 dollars) and the y-axis is labelled, price level (CPI, 2002 = 100) .3 lines are shown; AD, LRAS, SRAS.Line AD begins in the top left corner and slopes down to the end of the x-axis.Line SRAS begins in the bottom left corner and slopes up to the top right corner.Line LRAS is perpendicular to the x-axis, and intersects the lines AD and SRAS.The point of intersection of lines AD and SRAS is marked as A.
-Refer to Figure 11.10.In the figure above, if the economy is at point A, the appropriate monetary policy by the Bank of Canada would be to

• A)lower the target for the overnight interest rate.
• B)raise the target for the overnight interest rate.
• C)lower income taxes.
• D)raise income taxes.
• E)lower the desired reserve ratio.