What do open-market sales do to the price level and real GDP?
They increase the price level and real GDP.
They decrease the price level and real GDP.
They increase the price level and decrease real GDP.
They decrease the price level and increase real GDP.
When a central bank sets a target for the interest rate, it commits itself to which of the following?
If a central bank targets the interest rate, what does this imply?
If the interest rate is below a central bank's target, what should the central bank do?
Which of the following actions might we logically expect to result from rising stock prices?
Jim increases his consumption spending.
Firms sell fewer shares of new stock.
Firms spend less on investment.
People will save less.
How does a stock market boom affect household spending, and how would the Bank of Canada offset the
effects on the price level and real GDP?
If the stock market crashes, what would be the effect on aggregate demand and how could the Bank of Canada
offset those effects?