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(weight 25%) A. What are the two major tools of the Bank of Canada? Explain their meaning and impact on the economy in brief. (5

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(weight 25%) A. What are the two major tools of the Bank of Canada? Explain their meaning and impact on the economy in brief. (5 points) B. How the Bank of Canada uses these tools in case of i) recessionary gap (2.5 points) and ii) inflationary gap (2.5 points). Please explain how they can eliminate these gaps to get the full marks. Paragraph B

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