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:

Expectations

Beliefs or anticipations about the way events, actions, or processes will unfold in the future, often influencing individuals' behavior and decision-making.

Pressure

The continuous physical force exerted on or against an object by something in contact with it, or the influence or stress on a person to perform or conform.

Emotional Responses

The psychological and physiological reactions to stimuli that are experienced as feelings such as happiness, anger, or sadness.

Negative Emotions

Feelings that are generally unpleasant and may include sadness, anger, fear, or frustration, impacting one's mental well-being.