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In Addition to the Overall CPI Inflation Rate, the Bank

Question 16

Multiple Choice

In addition to the overall CPI inflation rate, the Bank of Canada plays close attention to the core inflation rate because it


A) is more volatile and therefore a better predictor of the underlying trend of inflation.
B) includes taxes, while the overall CPI rate does not.
C) has a lower average value which makes the Bank look better.
D) is less volatile and a better predictor of the underlying trend of inflation.
E) excludes eight volatile prices and is more likely to stay within the target range.

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