The Episode of Nine Successive Cuts in the Official Interest

question 123

Multiple Choice

The episode of nine successive cuts in the official interest rate in 2001 illustrates that,despite its stated goal of ensuring low and stable inflation,the Bank of Canada is also prepared to act pre-emptively to

• A) avoid future recessions.
• B) avoid future inflation.
• C) avoid future structural unemployment.
• D) avoid future expansionary gaps.
• E) avoid future budget deficits.

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Definitions:

Prototype

In cognitive science, a prototype is a mental representation or best example of a category, facilitating faster recognition and categorization of similar stimuli.

Cognitive Dissonance

The mental discomfort experienced by a person who holds two or more contradictory beliefs, ideas, or values.

Displacement

A defense mechanism where negative feelings or impulses are redirected from the original object to a more acceptable or safer target.

Overextension

A linguistic error, common in early language development, where a child applies a word in a broader context than is appropriate.