From an Initial Long-Run Macroeconomic Equilibrium, If the Bank of Canada

question 261

Multiple Choice

From an initial long-run macroeconomic equilibrium, if the Bank of Canada anticipated that next year aggregate demand would grow significantly faster than long-run aggregate supply, then the Bank of Canada would most likely

• A)increase income tax rates.
• B)decrease income tax rates.
• C)increase interest rates.
• D)decrease interest rates.
• E)decrease the operating band for the bank rate.

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Definitions:

Factor Analysis

A statistical technique that uncovers the fundamental factors or elements which account for the correlations observed among a collection of variables.

Subjective Bias

The tendency for personal judgments to be influenced by personal beliefs, opinions, and emotions rather than objective facts.

Objective

Not influenced by personal feelings or opinions in considering and representing facts.

L-data

Life record data, which includes real-world facts and outcomes from an individual's life used in psychological research.