If the economy is at potential output and the Bank of Canada increases the money supply,interest rates will likely increase in the short run.

Name: If the economy is at potential output and the Bank of Canada increases the money supply,interest rates will likely increase in the short run.
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Increasing the money supply typically lowers interest rates in the short run, as there is more money available for lending, which reduces the cost of borrowing.

If the Economy Is at Potential Output and the Bank