Which of the Following Provides the Best Example of How

question 25

Multiple Choice

Which of the following provides the best example of how inflation targeting by the Bank of Canada helps to stabilize the economy?

• A)Firms and households are aware of the announced inflation target and adjust their behaviour so as to maintain this level of actual inflation.
• B)When a recessionary gap reduces the rate of inflation (below the target level)the Bank of Canada will implement an expansionary monetary policy,which helps to close the gap.
• C)When the actual inflation rate falls below the targeted level of inflation,then commercial banks automatically increase deposit creation.
• D)When an output gap opens in the economy,the inflationary target adjusts to close the gap.
• E)When an output gap opens in the economy,the Bank of Canada chooses the inflation target appropriate for closing the gap.

---

Definitions:

Customer Complaints

Refers to expressions of dissatisfaction or concerns raised by customers regarding a company's products or services.

Third-Party Response

Reactions or actions taken by an external entity, not directly involved in a transaction or interaction, in response to an event or situation.

Voice Response

A technology that allows computers to interact with humans through the use of voice and DTMF tones input via a keypad.

Consumer Satisfaction

Consumer satisfaction is the measure of how products or services supplied by a company meet or surpass a customer's expectations, often considered key to building brand loyalty.