Approaches to Establishing Central Bank Credibility Include

question 7

Multiple Choice

Approaches to establishing central bank credibility include

• A)inflation targeting.
• B)exchange rate targeting.
• C)central bank independence.
• D)appointment of a more conservative central banker.
• E)all of the above.

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Definitions:

Maturity Value

The amount that will be payable to the holder of a financial instrument at its maturity date, including principal and interest.

Stated Interest Rate

The nominal or advertised interest rate on a loan or bond, not accounting for compounding or fees.

Interest Expense

The cost incurred by an entity for borrowed funds, represented as a financial charge for the privilege of borrowing money.

Bond Issuer

The entity, either a company or government, that borrows funds by issuing bonds.