Which of the Following Is a Disadvantage of Inflation Targeting

question 87

Multiple Choice

Which of the following is a disadvantage of inflation targeting?

• A) There is simplicity and clarity of the target.
• B) Inflation targeting does not rely on a stable money-inflation relationship.
• C) It imposes a rigid rule.
• D) Inflation targeting reduces the effects of inflation shocks.

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Definitions:

Economic Processes

The methods and activities through which goods and services are produced, distributed, and consumed in an economy.

Critical Period

A specific timeframe in the development of an organism when it is particularly sensitive to certain environmental stimuli, which can have a long-lasting effect on its future behavior and abilities.

Thalidomide

A drug that caused birth defects when given to pregnant women in the 1950s and 1960s, now used under strict controls for some diseases.

Prenatal Development

The developmental journey within the womb starting at conception and culminating in birth.