Suppose that your economy is in long run equilibrium, then the following shock occurred. The aggregate demand and aggregate supply in the market is represented by the following: LRAS P AS₂ Rate AD₂ What should the Bank of Canada do to close the gap? State whether you think it will be A, B, C, D, E, F, G, H, I, J and/or K. In your answer only include the letter. Put all choices that could apply. If you think it is ACD you can put both letters (put in alphabetical order!). Answer: AD₁ A. Increase taxes B. Decrease taxes E. Decrease Price of Bonds Increase Price of Bonds G. Increase the reserve ratio H. Decrease the Reserve Ratio I. Increase Bank J. Decrease Bank Rate. K. Nothing F.
Suppose that your economy is in long run equilibrium, then the following shock occurred. The aggregate demand and aggregate supply in the market is represented by the following: LRAS P AS₂ Rate AD₂ What should the Bank of Canada do to close the gap? State whether you think it will be A, B, C, D, E, F, G, H, I, J and/or K. In your answer only include the letter. Put all choices that could apply. If you think it is ACD you can put both letters (put in alphabetical order!). Answer: AD₁ A. Increase taxes B. Decrease taxes E. Decrease Price of Bonds Increase Price of Bonds G. Increase the reserve ratio H. Decrease the Reserve Ratio I. Increase Bank J. Decrease Bank Rate. K. Nothing F.
Chapter22: Aggregate Demand And Aggregate Supply
Section: Chapter Questions
Problem 1P
Related questions
Question
Mm.39.
Subject:- Economy
Transcribed Image Text:Suppose that your economy is in long run equilibrium, then the following shock
occurred. The aggregate demand and aggregate supply in the market is
represented by the following:
LRAS
Rate
AS₂
Answer:
AD₂
What should the Bank of Canada do to close the gap? State whether you think it will
be A, B, C, D, E, F, G, H, I, J and/or K. In your answer only include the letter. Put all
choices that could apply. If you think it is ACD you can put both letters (put in
alphabetical order!).
AD₁
A. Increase taxes B. Decrease taxes E. Decrease Price of Bonds
Increase Price of Bonds
G. Increase the reserve ratio H. Decrease the Reserve Ratio I. Increase Bank
J. Decrease Bank Rate. K. Nothing
F.
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