1. The government has determined that it is best to run a budget surplus for the current year. What type of policy is this? Where in the business cycle can we assume the country is? Which way is the government trying to shift the aggregate demand curve?
2. What is the difference between GDP and GNP?
3. Canada has seen the inflation rate rocket up to 5% over the past 3 months. What monetary policy could the Bank of Canada implement to reach their inflation target (2%)? What is one reason that the monetary policy implemented may not work?
4. What is the difference between nominal and real GDP? Why might we see a difference in nominal and real GDP?