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The Economy in the Diagram Below Begins in Long-Run Equilibrium

Question 108

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The economy in the diagram below begins in long-run equilibrium at E0. The economy in the diagram below begins in long-run equilibrium at E<sub>0</sub>. FIGURE 30-2 Refer to Figure 30-2.Suppose the economy is in a short-run equilibrium at after a negative aggregate supply shock.If the government's policy objective is to reduce unemployment,which of the following policies would be appropriate? A) Increase personal income-tax rates. B) Provincial governments increase the minimum wage in each province. C) The Bank of Canada sells large amounts of securities to Canadian financial institutions. D) The Bank of Canada raises the target for the overnight interest rate. E) The federal government initiates a cross-country highway infrastructure renewal program. FIGURE 30-2 Refer to Figure 30-2.Suppose the economy is in a short-run equilibrium at The economy in the diagram below begins in long-run equilibrium at E<sub>0</sub>. FIGURE 30-2 Refer to Figure 30-2.Suppose the economy is in a short-run equilibrium at after a negative aggregate supply shock.If the government's policy objective is to reduce unemployment,which of the following policies would be appropriate? A) Increase personal income-tax rates. B) Provincial governments increase the minimum wage in each province. C) The Bank of Canada sells large amounts of securities to Canadian financial institutions. D) The Bank of Canada raises the target for the overnight interest rate. E) The federal government initiates a cross-country highway infrastructure renewal program. after a negative aggregate supply shock.If the government's policy objective is to reduce unemployment,which of the following policies would be appropriate?


A) Increase personal income-tax rates.
B) Provincial governments increase the minimum wage in each province.
C) The Bank of Canada sells large amounts of securities to Canadian financial institutions.
D) The Bank of Canada raises the target for the overnight interest rate.
E) The federal government initiates a cross-country highway infrastructure renewal program.

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