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If the Economy Is at Potential Output and the Bank

question 226

True/False

If the economy is at potential output and the Bank of Canada decreases the money supply,in the short run the likely result will be a decrease in investment and a decrease in consumption.


Definitions:

Proved Reserves

Specific mineral deposits that have been shown by scientific examination and cost calculation to be extractable and deliverable to the market for use, with current technology and expected market conditions.

Mineral

A naturally occurring, inorganic solid with a definite chemical composition and crystalline structure, used in various industries.

Conservation

The sustainable management and use of natural resources to prevent depletion or degradation, safeguarding biodiversity and ecosystems.

Scarcer

Describes a condition where resources, goods, or services become less available or in shorter supply than previously.

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