The Bank of Canada Uses a "Core" Price Index, One

question 247

Multiple Choice

The Bank of Canada uses a "core" price index, one that excludes food and energy prices, to measure inflation.It does so because

• A)food and energy are inelastic goods and consumers will buy them regardless of their price.
• B)it wants to avoid the blame for high gasoline prices causing inflation.
• C)food and energy prices have wide swings that are not related to the causes of general inflation.
• D)food and energy prices do not change all that much during the short run, so are irrelevant to the calculation of inflation.
• E)food and energy make up a very small portion of the spending done by Canadian households.

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