If the Bank of Canada buys government securities from the chartered banks when the SRAS is relatively flat, what should we expect to happen to the price level and real GDP? a. Price level should rise little and real GDP should rise substantially. b. Price level should fall a little and real GDP should rise a little. c. Price level should rise a little and real GDP should fall a little. d. Price level should fall a little and real GDP should rise substantially.
If the Bank of Canada buys government securities from the chartered banks when the SRAS is relatively flat, what should we expect to happen to the price level and real GDP? a. Price level should rise little and real GDP should rise substantially. b. Price level should fall a little and real GDP should rise a little. c. Price level should rise a little and real GDP should fall a little. d. Price level should fall a little and real GDP should rise substantially.
Chapter11: Fiscal Policy
Section: Chapter Questions
Problem 1.4P
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Question
![If the Bank of Canada buys
government securities from the
chartered banks when the SRAS is
relatively flat, what should we expect
to happen to the price level and real
GDP?
a. Price level should rise a
little and real GDP should
rise substantially.
b. Price level should fall a
little and real GDP should
rise a little.
c. Price level should rise a
little and real GDP should
fall a little.
d. Price level should fall a
little and real GDP should rise
substantially.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc8698015-b98e-4970-8ec8-da37e0e206d8%2F4ddc0bfe-8f2d-457c-aac1-89aeeb458f53%2Fcrpehl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:If the Bank of Canada buys
government securities from the
chartered banks when the SRAS is
relatively flat, what should we expect
to happen to the price level and real
GDP?
a. Price level should rise a
little and real GDP should
rise substantially.
b. Price level should fall a
little and real GDP should
rise a little.
c. Price level should rise a
little and real GDP should
fall a little.
d. Price level should fall a
little and real GDP should rise
substantially.
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