As It Is Usually Practiced, Inflation Targeting Sets

question 63

Multiple Choice

As it is usually practiced, inflation targeting sets

• A)a specific inflation rate for the central bank to target and prohibits it from deviating from the target even when some shock pushes inflation away from that number.
• B)a specific inflation rate for the central bank to target but allows it to deviate from the target when some shock pushes inflation away from that number.
• C)sets some range of inflation rates for the central bank to target but prohibits it from deviating from that range even when some shock pushes inflation outside the range.
• D)sets some range of inflation rates for the central bank to target but allows it to deviate from that range even when some shock pushes inflation outside the range.

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Definitions:

Modelling

The process of representing a real-world system or phenomenon through a set of mathematical equations, simulations, or physical replicas.

Extinction

In behavior, the process by which a previously reinforced behavior is weakened by no longer providing reinforcement.

Negative Reinforcement

A behavioral technique that strengthens a behavior by removing or avoiding a negative outcome or stimulus.

Organizational Behaviour

The study of how people interact within groups, particularly the workplace, and how this affects the performance of businesses.