If the Economy Is at Potential Output and the Bank

question 325

Multiple Choice

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

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

---

Definitions:

National Defense

Public or governmental efforts to protect a country and maintain national security through armed forces and defense strategies.

Federal Spending

Expenditures by the federal government on programs, services, and operations, including everything from military funding to social security benefits.

Income in Taxes

refers to the portion of individuals' or businesses' earnings that is paid to the government as tax.

Corporate Income Taxes

Taxes imposed on the income or profit of corporations by the government.