Suppose the NAIRU for Canada is 6.5 percent, and the actual unemployment rate is 5 percent. If the Bank of Canada reduces its target for the overnight interest rate,
A) it will increase the unemployment rate.
B) the AS curve will shift upward.
C) it will move real GDP back toward potential GDP.
D) the AD curve will shift to the left.
E) it will worsen the existing inflationary gap.
Correct Answer:
Verified
Q13: A leftward shift in the AD curve
Q14: The process of disinflation can involve some
Q15: At the end of the 1970s, the
Q16: A constant inflation in the AD/AS macro
Q17: A rightward shift in the AD curve
Q19: Assume that an economy is currently in
Q20: In general, the sacrifice ratio will be
Q21: If the economy is faced with continued
Q22: One of the results of the restrictive
Q23: Suppose policymakers are faced with ending a
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents