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If the Bank of Canada Keeps the Real Interest Rate

Question 89

Multiple Choice

If the Bank of Canada keeps the real interest rate constant,an economic shock such as a housing market crash would cause the ________,and the output gap would ________.


A) MP curve to shift up; increase
B) MP curve to shift down; decrease
C) IS curve to shift to the left; decrease
D) IS curve to shift to the right; increase

Correct Answer:

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