Use the Information Below to Answer the Following Questions

question 35

Multiple Choice

Use the information below to answer the following questions.
Fact 30.1.1 Inflation Control Target Renewal
The 2011 inflation control target agreement between the Government of Canada and the Bank of Canada runs to the end of 2016.
Source: Bank of Canada, November 2011
-Refer to Fact 30.1.1. Choose the statement that is incorrect.

• A)It is important to renew the agreement because the target provides an anchor for low inflation expectations.
• B)It is important to renew the agreement because knowing that the Bank of Canada is striving to reach the target makes the short-run output-inflation tradeoff as favourable as possible.
• C)It is important to renew the agreement because with the agreement the inflation rate will always remain between 1 and 3 percent a year.
• D)Obstacles to the renewal of the agreement may occur because some critics argue that by focusing on inflation, the Bank sometimes permits the unemployment rate to rise.
• E)Obstacles to the renewal of the agreement may occur because some critics argue that by focusing on inflation, the Bank sometimes permits real GDP growth to suffer.

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Definitions:

Manufacturing Overhead

Any production expenses beyond direct labor and materials, which include overheads like equipment wear and tear, utilities, and rental fees.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, maintenance, and salaries of managers.

Cost of Goods Sold

The total cost associated with making or acquiring any goods sold during a specific period, including materials and labor.

Overapplied

A situation in cost accounting where the allocated or applied manufacturing overhead costs exceed the actual overhead costs incurred.