The Bank of Canada Uses the Rate of Change in the CPI

question 105

Multiple Choice

The Bank of Canada uses the rate of change in the CPI rather than the GDP deflator to measure inflation because

• A)the GDP deflator is more prone to biases and error than the CPI.
• B)the CPI is a more accurate reflection of the inflation faced by households than the GDP deflator.
• C)the GDP deflator lacks the information on inflation in the price of industrial equipment and other goods not found in the CPI.
• D)the CPI includes the prices of goods but not services.
• E)the CPI is easier to calculate than the GDP deflator.

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Definitions:

Real-Time Logistics Tracking

Refers to the technology and systems used to monitor and report the immediate location and status of goods, vehicles, or assets as they are transported from origin to destination.

Point-To-Point Service

A transportation or telecommunications service that directly connects two locations without any stops or transfers.

Variable Operating Costs

Expenses that fluctuate with the level of output or business activity.

Deregulation

The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.