71. What does technological growth do to the Long Run Aggregate Supply Curve? (A) Nothing. (B) Shifts it to the left. (C) Shifts it to the right.

(D) Causes a movement along the curve.

72. How does the Overnight Rate Target influence interest rates throughout the econ- omy?

(A) The Overnight Rate is the interest rate that banks use to borrow from each other. Therefore, the interest rates banks offer to the wider public are set with respect to this.

(B) It shifts the demand for money to the right, increasing its equilibrium value.

(C) It shifts the demand for money to the left, reducing its equilibrium value.

(D) The Bank of Canada has no influence, direct or indirect, on interest rates per se; this is more a function of government policy.

73. What is the reserve requirement for Canadian banks?

(A) 0 percent. (B) 0.01 percent. (C) 4.5 percent.

(D) 10 percent.

74. When the quality of a consumption good improves, what happens to the purchasing power of the dollar?

(A) It decreases, so the CPI understates the change in the cost of living if the quality change is not accounted for.

(B) It decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.

(C) It increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.

(D) It increases, so the CPI understates the change in the cost of living if the quality change is not accounted for.