Solved

Suppose the Canadian Economy Is Operating at Potential Output

Question 58

Multiple Choice

Suppose the Canadian economy is operating at potential output. A negative supply shock that is accommodated by an open market purchase by the Bank of Canada will cause ________ in real GDP in the long run and ________ in the aggregate price level in the long run, everything else held constant.


A) no change; an increase
B) no change; a decrease
C) an increase; an increase
D) a decrease; a decrease

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q15: The fact that an economy always returns

Q31: Everything else held constant,an increase in the

Q52: Everything else held constant,a decrease in the

Q53: Which of the followings does not shift

Q59: Aggregate demand and supply analysis can be

Q60: Explain and demonstrate graphically the effects of

Q63: Suppose the economy is producing at the

Q102: Because shifts in aggregate demand are not

Q107: Everything else held constant,an autonomous monetary policy

Q113: The aggregate demand curve is downward sloping