If,for any given inflation rate,the Bank of Canada raises interest rates less 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

If the Bank of Canada raises interest rates less than normal, this is called a monetary easing. In response to this, the aggregate demand (ADI) curve shifts to the right. Therefore, the correct choice is "easing; right" which is represented by option D.

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