Which of the Following Is Not an Argument Against Inflation

question 232

Multiple Choice

Which of the following is not an argument against inflation targeting?

• A)Inflation targeting reduces the flexibility of the Fed to pursue other policy goals.
• B)Inflation targeting assumes that the Fed can accurately forecast future inflation rates.
• C)Inflation targeting makes monetary policy ineffective because the targets are publicly announced.
• D)Inflation targeting holds the Fed accountable for an inflation goal,but may make it less likely the Fed will achieve other goals.

---

Definitions:

Labor Demand Schedule

A table or graph showing the quantity of labor that employers are willing to hire at different wage rates.

Profit-maximizing Combination

The selection of production inputs, price, and output levels that allow a firm to achieve the maximum possible profit.

Production Costs

The overall expenses associated with manufacturing goods or providing services, including labor, materials, and overhead.

Elasticity of Resource Demand

The responsiveness of the quantity demanded of a resource to a change in its price.