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If the Bank of Canada Were to Shift Its Policy

Question 95

Multiple Choice

If the Bank of Canada were to shift its policy reaction function rightward (i.e. ,an easing of monetary policy) ,the


A) IA line would shift upward,causing an increase in the inflation rate.
B) LRAS line would shift upward,causing an increase in the inflation rate.
C) IA line would shift downward,causing a decrease in the inflation rate.
D) ADI curve would shift to the left.
E) ADI curve would shift to the right.

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