Figure 131 Alt Text for Figure 13

question 263

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 the line.Point B is plotted to the right of point A.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 beneath 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 B in the long run?

• A)Buy Canada bonds.
• B)Sell Canada bonds.
• C)Raise the discount rate.
• D)Decrease the money supply.
• E)No policy will move the economy to point B in the long run.