Which of the Following Is an Advantage to Inflation Targeting

question 24

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) The performance has been quite good.

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Definitions:

GAS

General Adaptation Syndrome, a three-stage process that describes the physiological changes the body goes through when under stress.

Acute Reaction

A sudden and severe response, either physiological or psychological, to an external stimulus or situation.

Positive Stressor

A beneficial stress that motivates or enhances psychological growth or physical health.

Adrenaline

A hormone secreted by the adrenal glands, increasing heart rate and energy in response to stress or excitement.