Although the Increase in Long-Run Aggregate Supply (Other Things Equal)

Multiple Choice

Although the increase in long-run aggregate supply (other things equal) , would expand real GDP and lower the price level, the declines in the price level has not been part of Canada's growth experience.This is because:

A) the Bank of Canada has taken no action to change the nation's money supply.
B) the Bank of Canada has increased the money supply much less than the increase in aggregate supply.
C) the increase in the money supply by Bank of Canada has matched the increase in aggregate supply.
D) the Bank of Canada usually engineers inflationary rightward shifts of the aggregate demand curve that are faster than the deflationary rightward shifts of the aggregate supply curve.