The Bank of Canada plays a larger role than Parliament and the Prime Minister in stabilizing the economy because
A) the Bank of Canada can more quickly change monetary policy than the Parliament can change fiscal policy.
B) the Bank of Canada can immediately recognize when real GDP is below or above potential GDP.
C) changes in interest rates have a considerably larger effect on the economy than changes in government purchases or taxes.
D) changes in interest rates have their full effect on the economy in a short period of time, whereas changes in government spending and taxes have their full effect over a long period of time.
E) the Bank of Canada has more authority than parliament.
Correct Answer:
Verified
Q156: A change in tax rates
A)has a less
Q157: If the absolute value of the tax
Q157: The tax multiplier is calculated as "one
Q158: Figure 12.13 Q159: The tax multiplier Q160: Suppose real GDP is $1.7 trillion, potential Q162: Suppose that the current equilibrium GDP is Q163: Suppose real GDP is $1.8 trillion and Q164: Assume that in 2019 aggregate demand in Q166: The crowding out of private spending by
A)is negative.
B)is larger in absolute
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