In the long run, which of the following will happen if the Bank of Canada increases the rate at which it increases the money supply?
A)Inflation will be higher.
B)Unemployment will be lower.
C)Real GDP will be higher.
D)Unemployment will be higher.

Question

Quizplus · Accepted Answer

Inflation will be higher in the long run if the Bank of Canada increases the rate at which it increases the money supply. This is because an increase in the money supply can lead to a higher level of demand, which can push up prices in the economy.

In the Long Run, Which of the Following Will Happen