Question
True Or False 1 The supply of money is determined entirely by the Bank of Canada through monetary policy. 2 The following items: banknotes, demand
True Or False
1 The supply of money is determined entirely by the Bank of Canada through monetary policy. 2 The following items: banknotes, demand deposits and coins, are not part of M1 3 In an overemployment equilibrium, real GDP is higher than potential GDP. 4 If the economy is in an inflationary gap, the Bank of Canada generally applies a restrictive monetary policy. 5 Full employment is characterized by the equality between potential and real GDP. 6 It is impossible for the economy to grow and the price level to fall at the same time. 7 In the aggregate supply relationship, the price level depends on monetary policy 8 When an economic agent decides to buy shares in a private company, he does so with a transaction motive. 9 Stagflation can be caused by contradictory contractionary and expansionary fiscal policies. 10 Monetary policy affects GDP, inflation, employment and the exchange rate
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