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Monetary Policy
The Bank of Canada
MP to Lower
Unemployment
If BOC buys
securities in
Open Market,
AD shifts to the
right to restore
full employment.
Ripple Effects of Monetary Policy
MP to Lower
Inflation
Monetary policy
decreases AD to
restore full
employment and
avoid inflation.
Ripple Effects of Monetary Policy
Investment demand
curve.
2. Expenditure
increases by ∆I.