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During the Period of Economic Recovery Between 1983 and 1987

Question 76

Multiple Choice

During the period of economic recovery between 1983 and 1987, the main challenge for the Bank of Canada was to


A) stabilize the unemployment rate.
B) increase the money supply so that only a mild form of inflation would reappear.
C) decrease the money supply to dampen inflationary expectations.
D) accommodate the recovery, and the associated growth in money demand, without increasing the money supply so much as to refuel inflation.
E) stabilize the exchange rate between the U.S. and Canadian dollars.

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