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In a competitive market free of government regulation,
a) price adjusts until quantity demanded is greater than quantity supplied
b) price adjusts until quantity demanded is less than quantity supplied
c) price adjusts until quantity demanded equals quantity supplied
d) supply adjusts to meet demand at every price
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Suppose government spending increases in a closed economy. Would the effect on aggregate demand be larger if the Bank of Canada took no action in response, or if the Bank were committed to maintaining a fixed interest rate.
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