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In the Early 1980s,when the Bank of Canada Was Focusing

Question 103

Multiple Choice

In the early 1980s,when the Bank of Canada was focusing its attention on reducing the growth rate of the money supply,an unplanned surge in ________ led to an unintended tight monetary policy which caused ________.


A) money demand; decreased inflation and a serious recession
B) money supply; a drop in the overnight lending rate and increased investment
C) desired investment; inflation to increase
D) desired investment; the Bank of Canada to adopt a core inflation targeting policy
E) money supply; the Bank of Canada to apologize to the public for its policy error

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