Suppose There Is an Inflationary Gap,and the Bank of Canada

question 81

Multiple Choice

Suppose there is an inflationary gap,and the Bank of Canada does not respond in any way to change its monetary policy.This scenario will lead to

• A)an increase in wages and an upward shift of the AS curve.
• B)a wage-price spiral.
• C)a permanent decrease in output.
• D)the emergence of a recessionary gap.
• E)reduced transactions demand for money,an increase in the price of bonds,and a lower rate of interest.

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Definitions:

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The phenomenon where one person's emotions and related behaviors directly trigger similar emotions and behaviors in other people.

Ambiguous Language

Language that lacks clarity and specificity, often leading to confusion and misunderstanding.

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