Multiple Choice
The Bank of Canada's response to changes in inflation is more complex than identified in the ADI-IA model because
A) the model does not distinguish between core inflation and total CPI inflation.
B) we cannot calculate the monetary policy rule.
C) the self-correcting mechanism is only effective for recessionary gaps.
D) the self-correcting mechanism is only effective for expansionary gaps.
E) the Bank of Canada only responds to current inflation
Correct Answer:
Verified
Correct Answer:
Verified
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