If We Observe That the Bank Rate Has Fallen,we Can

question 9

Multiple Choice

If we observe that the bank rate has fallen,we can conclude that the

• A)Bank of Canada has implemented a contractionary monetary policy.
• B)Bank of Canada has abandoned its inflation target.
• C)Government of Canada has reduced the money supply.
• D)Bank of Canada has implemented an expansionary monetary policy.
• E)Bank of Canada has adjusted the rate it pays on Treasury bills.

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Definitions:

Unit-elastic

Unit-elastic describes a situation where a change in price leads to an equivalent proportional change in quantity demanded or supplied, resulting in no revenue change for the seller.

Wage Increase

An upward adjustment in the amount of earnings a worker receives for their labor.

Elasticity of Resource Demand

A measure of how the quantity demanded of a resource changes in response to a change in price.

Resource Prices

The cost of inputs used in the production of goods and services, such as labor, capital, land, and raw materials.