The implementation of an expansionary policy by the Bank of Canada would result in which of the following?
A) higher unemployment
B) lower inflation
C) lower interest rates
D) decreased economic growth

Question

Quizplus · Accepted Answer

An expansionary policy would involve the Bank of Canada injecting money into the economy, which would lead to a decrease in interest rates. This decrease could incentivize borrowing and investing, which could lead to increased economic growth. Additionally, a decrease in interest rates could lead to higher inflation due to increased spending, but this is not always the case. Higher unemployment and decreased economic growth would be associated with a contractionary policy, not an expansionary one.

The Implementation of an Expansionary Policy by the Bank of Canada