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If the Bank of Canada believes the economy is about to fall into recession, what actions should it take?If the Bank of Canada believes the

  1. If the Bank of Canada believes the economy is about to fall into recession, what actions should it take?If the Bank of Canada believes the inflation rate is about to increase, what actions should it take?
  2. What do you understand by (i) recessionary gap and (ii) inflationary gap?
  3. What are the autonomous components and what are the induced components of Aggregate Expenditure?
  4. If the Federal Government believes the economy is about to fall into recession, what actions should it take?If the Federal Government believes the inflation rate is about in increase, what actions should it take?
  5. Which can be changed more quickly; monetary policy or fiscal policy?Briefly explain.
  6. Give the formula for the simple deposit multiplier.If the desired reserve ratio is 20%, what is the maximum increase in chequing account deposits that will result from an increase in the bank reserves of $20,000?

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