Canada's actual rate of inflation is fairly constant around the 2% level.We can conclude that
A) real GDP must be below potential GDP because we also have positive unemployment.
B) real GDP must be above potential GDP.
C) the Bank of Canada is accommodating this level of inflation with increases in the money supply.
D) the expectations about inflation are consistently wrong.
E) the economy is consistently experiencing an inflationary gap.
Correct Answer:
Verified
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