In Practice, Inflation Targeting Is Better Considered as Operating with Constrained

question 82

Multiple Choice

In practice, inflation targeting is better considered as operating with constrained discretion rather than according to a policy rule because central banks with inflation targets typically:

• A) are not allowed to adjust the target in the event of shocks.
• B) set the inflation target as a range rather than as a particular number.
• C) are not held accountable for achieving their target.
• D) must achieve their target regardless of economic conditions.

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Definitions:

Command and Control Culture

An organizational culture characterized by strict hierarchy, where decisions and orders come from the top down.

Literacy Levels

The extent to which individuals have reading and writing skills, impacting their ability to communicate and access information.

Safety Violations

Acts or omissions that breach established safety protocols, potentially putting individuals at risk.

Productivity Levels

The rate at which goods or services are produced relative to the input of resources, often used as a measure of efficiency.