Why is the business cycle so important to Canadian National Railway?O A Consumer spending rises and falls with the business cycle, which causesdemand for shipping services to rise and fall.O B) The business cyde causes consumers to permanently increase their consumption of services, permanently reducing the demand for shipping by rail.O a Canadian National alvay plays a key role in setting the price level.O D) Fewer goods are shipped by rail now than in the past.O e The business cyce causes the federal government to invest more inupgrading the railway system.
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b. Choose the correct statement about the comparison of how sensitive CN's sales are likely to be to changes in the business cycle to how sensitive the following firms' sales are likely to be to changes in the business cycle. (In other words, choose the statement that explains correctly whether CN's sales are likely to fluctuate more or less than the sales of each of these other firms as the economy moves from recession to expansion and back to recession.) A. Kent Homes is equally sensitive to changes in the business cycle as CN because they deal with the same raw materials. B. Tim Hortons might be more sensitive to changes in the business cycle than CN because coffee and baked goods are Giffen goods and tend not to be cut back on as quickly as other products. C. Harlequin Romance Ltd. may, in some cases, be countercyclical as opposed to CN because purchasing a novel may be a low-cost complement for other forms of entertainment. D. Kent Homes is likely to be subject to greater fluctuations than CN because people tend not to buy new homes when they are concerned about the future. CN is a train.
James K.
2) Which of the following situations illustrates how fiscal policy can influence aggregate demand? A) The Bank of Canada raises interest rates so people plan to buy less consumer durables. As a result, aggregate demand decreases. B) The government increases its expenditures. The demand for loanable funds increases, which raises the real interest rate. Investment increases. The government reduces the goods and services tax. As a result, consumption expenditure increases and aggregate demand increases. D) Investors, anticipating an erosion of financial wealth due to inflation, decide to save more. As a result, aggregate demand decreases. E) The exchange rate value of the Canadian dollar rises. As a result, people living near the U.S.-Canada border increase their imports of goods and net exports decrease.
Manasvee S.
Qudsiya A.
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