In the 1970s, in Canada, interest rates trended upward. During this same time period, ________.

Question

Quizplus · Accepted Answer

When interest rates are high, it typically indicates a tighter monetary policy. As a result, the rate of money growth tends to increase as the government seeks to stimulate economic activity. Additionally, during the 1970s, inflation was a significant concern, and the government may have been willing to run a budget deficit to combat it, therefore, the government budget deficit likely trended upward rather than downward.

In the 1970s, in Canada, Interest Rates Trended Upward