Canada's Actual Rate of Inflation Is Fairly Constant Around the 2

question 85

Multiple Choice

Canada's actual rate of inflation is fairly constant around the 2% level.We can conclude that

• A)real GDP must be below potential GDP because we also have positive unemployment.
• B)real GDP must be above potential GDP.
• C)the Bank of Canada is accommodating this level of inflation with increases in the money supply.
• D)the expectations about inflation are consistently wrong.
• E)the economy is consistently experiencing an inflationary gap.

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Definitions:

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