Assume That the Bank of Canada's Policy Is to Stabilize

question 18

Multiple Choice

Assume that the Bank of Canada's policy is to stabilize the interest rate.If the economy begins to expand,the Bank of Canada:

• A)would have to increase the money supply to keep the interest rate from falling
• B)would have to decrease the money supply to keep the interest rate from rising
• C)would have to increase the money supply to keep the interest rate from rising
• D)can keep the interest rate stable without altering the money supply
• E)will have to accept a lower interest rate if it does not alter the money supply

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Definitions:

Management Theories

A collection of ideas and principles that aim to explain how organizations operate and are managed.

Maslow's Hierarchy

A psychological theory proposed by Abraham Maslow that outlines a five-tier model of human needs, from basic physiological needs to self-actualization.

Abraham Maslow's Hierarchy

A theory in psychology, proposed by Abraham Maslow, which comprises a five-tier model of human needs, depicted as hierarchical levels within a pyramid.

Safety Needs

Fundamental requirements for security and protection from physical and emotional harm, as one of the levels in Maslow's hierarchy of needs.