Consider a central bank that chooses to implement its monetary policy by expanding the money supply by a fixed percentage amount in every year. One important disadvantage with this approach to monetary policy is that it may.. O a. Create a recessionary output gap. O b. Be destabilising if the demand for money is unstable. O c. Be inconsistent with the Bank of Canada Act. O d. Lead to sustained inflation. O e. Lead to stable growth of national income.

Consider a central bank that chooses to implement its monetary policy by expanding the money supply by a fixed percentage amount in every year. One important disadvantage with this approach to monetary policy is that it may.. O a. Create a recessionary output gap. O b. Be destabilising if the demand for money is unstable. O c. Be inconsistent with the Bank of Canada Act. O d. Lead to sustained inflation. O e. Lead to stable growth of national income.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume contractionary monetary policies have had the effect of lowering inflation rates from a 6% annual rate down to 2%. What do economists call this drop in inflation? O a. Deflation. O b. Inflation. O c. Devaluation. d. Depreciation. O e. Disinflation.