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If the Economy Is at Potential Output and the Bank

question 28

Multiple Choice

If the economy is at potential output and the Bank of Canada increases the money supply,in the short run the likely result will be a(n) _____ in investment and a(n) _____ in consumption.


Definitions:

Increase

An upward movement in quantity, size, value, or any other measure, indicating growth.

Decrease

A reduction in size, quantity, or degree of something.

Accrual Accounting

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

Rent Expense

The cost incurred by a company to lease property or equipment for business operations, reported as an operating expense.

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