45. When the Bank of Canada raises interest rates, the international transmission mechanism creates a ________ and the domestic transmission mechanism creates a ________.

A) negative supply shock; negative supply shock

B) negative demand shock; positive demand shock

C) negative supply shock; negative demand shock

D) positive demand shock; positive demand shock

E) negative demand shock; negative demand shock

46. Which statementcorrectlydescribes how monetary policy affects the economy?

A) House sales are down, due to increases in the money supply.

B) The extra money pumped into the economy by the central bank is increasing exports.

C) The decreased supply of money is helping sell exports abroad.

D) Businesses are investing more, now that monetary policy has attacked the inflationary gap.

E) The extra money pumped into the economy by the central bank is reducing jobs.

47. The original Phillips Curve trade-off between inflation and unemployment works as long as

A) animal spirits do not change.

B) there is inflation-rate targeting by the central bank.

C) there is an independent central bank.

D) exchange rates do not change.

E) expectations about inflation do not change.

48. The size of the multiplier effect of government spending issmallerwhen

A) import spending is lower.

B) import spending is higher.

C) saving is lower.

D) export spending is higher.

E) income taxes are lower.

49. If aggregate demand does not change, aggregate supply policies for economic growth

A) increase real GDP, increase potential GDP, and raise the price level.

B) increase real GDP, increase potential GDP, and lower the price level.

C) increase real GDP, do not change potential GDP, and decrease the price level.

D) increase real GDP, do not change potential GDP, and do not change the price level.

E) fail to produce economic growth.

50. Fiscal policies encouraging savings and business capital investment

A) decrease both aggregate supply and aggregate demand.

B) decrease aggregate supply and increase aggregate demand.

C) increase aggregate supply and decrease aggregate demand.

D) increase both aggregate supply and aggregate demand.

E) increase aggregate supply but not change aggregate demand.