a. What actions taken by the Bank of Canada in 2009 and 2010 would you expect to influence Canadian real GDP growth in 2011 and 2012? Explain how those policy actions would transmit to real GDP.
b. Draw a graph of aggregate demand and aggregate supply to illustrate your answer to part (a).
The Organization for Economic Co-operation and Development predicted Tuesday that Canada will lead industrialized countries in economic growth during the first half of this year. The think tank also said the economic outlook has brightened for all G7 countries since its last forecast in November, with the exception of Japan. When the numbers are final, Canada is expected to have grown by 5.2 per cent in the first three months of 2011, and 3.8 per cent in the second quarter.