Question 24 (1 point) Given the annual rate of inflation, the "rule of 70" allows one to: determine whether the inflation is demand-pull or cost-push. O calculate the accompanying rate of unemployment. calculate the number of years required for the price level to double. determine when the value of a real asset will approach zero.Question 25 (4 points) Interest Rate Interest Rate 7% 7% 6% 6% 5% 5% Sm 4% 4% 50 100 150 200 250 Quantity of Money 5 10 15 20 25 Investment Demand (million CAD) (million CAD) The left diagram in the above figure shows the equilibrium in the money market in Canada, and the one on the right shows the demand for investment, as a function of interest rate. Suppose the desired reserve ratio in Canada is 20%. The Bank of Canada has decided to stimulate the investment in the economy by printing and injecting currency into the money market. The goal is to increase the investment by $15 million. How much currency must the bank print to achieve the desired outcome? (Calculate your answer in millions of CAD, round it to one decimal places, and write it without units. E.g., write 1.0 for $1 million.) Your Answer: AnswerQuestion 22 (1 point) A major concern with an expansionary fiscal policy is its effect on private investment. In particular, an increase in government spending can crowd out private investment because, by running a surplus, the government's increased supply of bonds discourages private investors. by running a deficit, the government's decreased demand for borrowing leads to a decrease in interest rate. by running a surplus, the government's decreased supply of bonds encourages private investors. by running a deficit, the government's increased demand for borrowing leads to an increase in interest rate. Question 23 (1 point) How does the Canadian government's stimulus package would help the economy at a time of recession following the novel corona-virus outbreak? It will restore the confidence in the economy. OIt will push the aggregate supply to the left. It will help boost the aggregate demand in the economy, pushing the GDP toward its full-employment levels. It will create unanticipated inflation, which helps the economy recover.Question 21 (3 points) Suppose an economy is initially in equilibrium at its potential output level. As a result of an unexpected crisis in the financial markets, the AD curve suddenly shift to the left by a horizontal distance equal to $100 billion. Suppose the government has decided to restore the economy to its initial level of output by simultaneously increasing its spending and increasing taxes (so that it does not run into a deficit). Assuming the marginal propensity to consume in this economy is 0.75, by how much must the government increase its spending (and taxes) to achieve its goal? (Calculate your answer in billions of CAD, round it to one decimal places, and write it without units. E.g., write 1.0 for $1 billion.) Your Answer: Answer Question 22 (1 point) A major concern with an expansionary fiscal policy is its effect on private investment. In particular, an increase in government spending can crowd out private investment because, t's increased supply of bonds discourages