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The 2008-2009 Global Recession Had an Effect on Canadian Federal

Question 124

Multiple Choice

The 2008-2009 global recession had an effect on Canadian federal and provincial budgets.In general,government debt-to-GDP ratios rose in Canada because of


A) contractionary monetary policy and expansionary fiscal policy.
B) an increased burden of debt-service payments due to the necessary reduction in the target overnight interest rate by the central bank.
C) the decline in net tax revenues due to the recession,as well an expansionary fiscal policy.
D) the necessity to balance the primary budget at the same time that the interest rate on government debt was rising.
E) the necessity to balance the cyclically adjusted budget at the same time that the interest rate on government debt was rising.

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