Which of the Following Is an Advantage to Inflation Targeting

question 37

Multiple Choice

Which of the following is an advantage to inflation targeting?

• A) There is a delayed signal about achievement of the target.
• B) Inflation targets could impose a rigid rule on policymakers.
• C) There is potential for larger output fluctuations.
• D) There is transparency.

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Definitions:

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends, indicating how much money a company returns to shareholders versus retaining.

Investing Activities

Part of cash flow analysis that involves the purchase or sale of long-term assets and investment securities, reflecting a company's investment growth or reduction.

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from gross profit.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity level.