Which of the Following Is Not True with Respect to Inflation

question 38

Multiple Choice

Which of the following is not true with respect to inflation targeting?

• A) The Fed could lose credibility if the inflation rate deviates substantially from the Fed's target inflation rate.
• B) A focus on inflation could result in a much higher unemployment rate.
• C) Inflation targeting may not only satisfy the inflation goal, but could also achieve the employment stabilization goal in the long run.
• D) If unemployment is slightly higher than normal, while inflation is at the peak of the target range, an inflation targeting approach would like advocate a loose monetary policy.

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