You are advising the Bank of Canada and the Federal Government. The economy is in a state of contraction. a) Explain what the likely situation is with Canada’s main economic indicators during a contraction in the business cycle. b) Determine the monetary policy actions that you would recommend and explain how these actions will help to turn the economy around.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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You are advising the Bank of Canada and the Federal Government. The economy is in a state of contraction.

  1. a) Explain what the likely situation is with Canada’s main economic indicators during a contraction in the business cycle.
  2. b) Determine the monetary policy actions that you would recommend and explain how these actions will help to turn the economy around.
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