One problem with focusing on the CPI when conducting monetary policy is that
A) the CPI is too stable to accurately reflect the changes occurring in the Canadian economy.
B) the CPI distorts the value of commercial bank reserves.
C) many elements in the CPI change for reasons unrelated to the state of the Canadian economy.
D) changes in monetary policy have little effect on the CPI, especially in the long run.
E) it is closely related to the value of M2.
Correct Answer:
Verified
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