Which of the Following Is NOT a Difference Between the Bank

question 110

Multiple Choice

Which of the following is NOT a difference between the Bank of Canada's explanation of how monetary policy works and the Keynesian cross explanation?

• A) The Keynesian cross explanation assumes that interest rate actions of the Bank have no effect on the exchange rate or on net exports.
• B) The Keynesian cross explanation does not make it explicit that there are time lags between changes in the interest rate by the Bank and their ultimate effects on the economy.
• C) The Keynesian cross explanation assumes that prices are fixed.
• D) The Keynesian cross explanation assumes that the inflation rate is zero.
• E) The Keynesian cross explanation does not allow interest rates to affect consumption or investment.

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Definitions:

Independent Agencies

Agencies of the United States government that operate independently of the federal executive departments, though they are still subject to presidential control.

Richard Nixon

The 37th President of the United States (1969-1974), known for his foreign policy achievements and the Watergate scandal, which led to his resignation.

Pardoned

The act of forgiving a person for their offenses, especially by a figure of authority such as the President or a governor, effectively erasing the legal consequences of the offense.

Offenses

Violations of legal codes or laws, which can range from minor infractions to serious felonies.