Potential Advantages of Nominal GDP Targeting Include

question 17

Multiple Choice

Potential advantages of nominal GDP targeting include

• A)it implies that the central bank will respond to slowdowns in the real economy even if inflation is not falling.
• B)real GDP growth that is below potential or inflation that is below the inflation objective will encourage more expansionary monetary policy.
• C)it focuses not only on controlling inflation but also explicitly on stabilizing real GDP.
• D)all of the above.

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