What Actions Could the Bank of Canada Take to Achieve

question 70

Multiple Choice

What actions could the Bank of Canada take to achieve consistent growth in real GDP at 4 percent per year?

• A)The Bank of Canada could increase in the growth rate of the money supply by 1 percent each year until the inflation rate was exactly equal to 4 percent.
• B)The Bank of Canada could maintain a growth rate of the money supply of 4 percent, regardless of whether inflation was rising or falling in the economy.
• C)The Bank of Canada could follow contractionary monetary policy that would reduce the overnight interest rate to zero so investment would rise consistently.
• D)The Bank of Canada has no direct control over real GDP in the long run, so there are no actions it could take to achieve this goal.
• E)The Bank of Canada could relax lending standards for the banking system.

---

Definitions:

Civic Development

The process by which individuals become aware of their rights, duties, and roles within a community, fostering participation and engagement.

Educational Philosopher

A thinker concerned with the nature, aims, and problems of education, contributing theories or concepts influencing educational practices.

John Dewey

An American philosopher, psychologist, and educational reformer whose ideas have been influential in education and social reform.

Physical Barrier

An actual obstruction that limits or impedes access, movement, or visibility, often in an environment or between entities.