If,for any given inflation rate,the Bank of Canada raises interest rates more than normal,this is called a monetary _________ and the aggregate demand (ADI)curve shifts to the __________.
A) "tightening";right
B) "tightening";left
C) gap;right
D) "easing";right
E) "easing";left

Question

Quizplus · Accepted Answer

When the Bank of Canada raises interest rates more than normal, it is referred to as "tightening" monetary policy, which typically leads to a decrease in aggregate demand, causing the ADI curve to shift to the left.

If,for Any Given Inflation Rate,the Bank of Canada Raises Interest