All of the Following Arguments Are Presented in Favor of Inflation

question 44

Multiple Choice

All of the following arguments are presented in favor of inflation targeting EXCEPT

• A)it would draw attention to what the central bank can achieve in practice.
• B)it would provide an anchor for inflationary expectations.
• C)it would promote accountability by providing a yardstick by which policy can be measured.
• D)it would reduce the lags inherent in monetary policy.

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Definitions:

Prime Minister

The head of government in a parliamentary system, responsible for running the country and making policy decisions.

Confidence Interval

A range of values derived from sample statistics that is likely to contain the value of an unknown population parameter, expressed with a certain level of confidence.

Medical Students

Individuals enrolled in a medical school program to become physicians.

Rural Community

A community located in countryside areas, typically characterized by smaller populations and more spread-out living arrangements compared to urban areas.