If the Economy Is at Potential Output and the Bank

question 88

Multiple Choice

If the economy is at potential output and the Bank of Canada decreases the money supply,in the long run real GDP will likely:

• A) fluctuate randomly.
• B) remain the same.
• C) decrease.
• D) increase.

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Definitions:

Loosely Defined Norms

Social rules that are not strictly enforced or are vague in nature, often leading to varied interpretations.

Substantial Number

A phrase referring to a significant or considerable amount or quantity of something.

Collectivity

A term referring to a group or assembly of individuals who share common interests, values, or goals, acting together as a unified entity.

Collective Behaviours

Behaviours that occur when people come together to achieve a meaningful short-term goal.