Due to the Lack of Timely Data for the Price

question 55

Multiple Choice

Due to the lack of timely data for the price level and economic growth, the Bank of Canada's strategy ________.

• A) targets the exchange rate, since the Bank of Canada can control this variable
• B) targets the price of gold, since it is closely related to economic activity
• C) uses an intermediate target, such as an interest rate
• D) stabilizes the consumer price index, since the Bank of Canada can control the CPI

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Definitions:

Exchange Rate

The price of one currency in terms of another currency.

Net Exports

The value of a country's total exports minus its total imports, representing the net amount of goods and services traded with other countries.

Open-Economy Macroeconomic Model

A model that analyzes an economy that is engaged in international trade and investment flows.

Domestic Investment

The total amount of money invested in the resources within a country's borders, including but not limited to businesses, infrastructure, and technology.