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Refer to Figure 28-1. If the Bank of Canada raises the target interest rate from 2% to 3%, it is pursuing a(n) ________ monetary policy

Refer to Figure 28-1. If the Bank of Canada raises the target interest rate from 2% to 3%, it is pursuing a(n) ________ monetary policy and the quantity of money demanded will ________.

Select one:

a. expansionary; fall

b. expansionary; not change

c. contractionary; rise

d. contractionary; fall

e. expansionary; rise

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