Starting from Long-Run Equilibrium, If a Drought Pushes Up Food

question 6

Multiple Choice

Starting from long-run equilibrium, if a drought pushes up food prices throughout the economy, the Bank of Canada could move the economy more rapidly back to full employment output by:

• A)increasing the money supply, but at the cost of permanently higher prices.
• B)decreasing the money supply, but at the cost of permanently lower prices.
• C)increasing the money supply, which would restore the original price level.
• D)decreasing the money supply, which would restore the original price level.

---

Definitions:

Convenience Sample

A non-probability sampling method where the sample is taken from a group of people easy to contact or to reach.

Longitudinal Sample

A research sample that is observed over a long period of time to track changes and developments in the subjects.

Operational Definition

A clear, precise description of a variable in terms of the procedures or operations by which it can be observed and measured.

Grief

The deep sorrow experienced due to loss, especially of a loved one, encompassing various emotional stages and processes.