Need help

Consider the effects of events in the U.S. economy on the Canadian economy and on Canadian monetary policy. a. If a serious recession begins in the United States, what is the likely effect on Canadian aggregate demand? O A. There is an increase in Canadian aggregate demand and thus a positive AD shock occurs. O B. There are no changes in Canadian aggregate demand. O C. There is a reduction in Canadian aggregate demand and thus a negative AD shock occurs. O D. The effect on Canadian aggregate demand is entirely uncertain. b. If Canadian real GDP was equal to Y* before the U.S. recession began, what would be the likely response by the Bank of Canada? The Bank of Canada would probably O A. increase the money supply or reduce interest rates, which would result in an increase in aggregate supply. O B. reduce the money supply or increase interest rates, which would result in a decrease in Canadian net exports. C. increase the money supply or reduce interest rates, which would result in an increase in aggregate demand. O D. reduce the money supply or increase interest rates, which would result in an appreciation of the Canadian dollar. c. Given the mobility of financial capital across international boundaries, what is the likely effect on Canadian aggregate demand from a policy by the U.S. Federal Reserve that reduces U.S. interest rates? Canadian net exports will and therefore Canadian aggregate demand will d. Given your answer to part (c), explain why Canadian monetary policy might sometimes appear to "mirror" U.S. monetary policy even though the Bank of Canada is wholly independent from the U.S. Federal Reserve. If the U.S. Federal Reserve reduces U.S. interest rates and the Bank of Canada does nothing to match the U.S. policy, O A. the short-run effect will slow down economic growth in the United States. O B. Canada will break an international agreement with the United States. O C. the short-run effect will be an extremely high level of inflation in Canada. O D. the short-run effect will be a slowdown in Canadian economic growth