The Principal Method Used by the Bank of Canada to Change

question 82

Essay

The principal method used by the Bank of Canada to change the money supply is through open-market operations.Use the aggregate demand-aggregate supply model to illustrate graphically the impact in the short run and the long run of a Bank decision to increase open-market purchases.Be sure to label:
i.the axes
ii.the curves
iii.the initial equilibrium values
iv.the direction the curves shift
v.the short-run equilibrium values
vi.the long-run equilibrium values.State in words what happens to prices and output in the short run and the long run.

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Definitions:

Break-Even Analysis

An evaluation to determine the point at which revenue received equals the costs associated with receiving the revenue, indicating no net loss or gain.

Sales And Expense

Refers to the process of selling goods or services and the costs incurred during this process.

Compact Disc

A portable, digital optical disc storage format used to store and play back audio recordings, as well as other types of data.

Marketing Objectives

Specific goals a company aims to achieve through its marketing strategies, such as increasing brand awareness or market share.