One Reason Most Central Bankers Do Not Set an Inflation

question 14

Multiple Choice

One reason most central bankers do not set an inflation target of zero is:

• A)it is almost impossible to achieve.
• B)they believe it would cause price volatility.
• C)the central bank could hit the zero nominal-interest-rate bound.
• D)none of the answers given is correct.

---

Definitions:

Advantages

Benefits or favorable aspects associated with a particular action, decision, or situation.

Disadvantages

The negative or less favorable aspects of a situation, decision, or condition that may hinder success or satisfaction.

Case Studies

Descriptive research approaches that involve in-depth examinations of single subjects, events, organizations, or situations.

Drawbacks

Negative consequences or disadvantages associated with a decision, action, or situation.