Which of the Following Statements About Inflation Targeting Is True

question 218

Multiple Choice

Which of the following statements about inflation targeting is true?

• A)Inflation targeting by the central banks in other countries has not typically lowered inflation.
• B)Inflation targeting would not reduce the flexibility of monetary policy to address other policy goals.
• C)Inflation targeting would not allow the central bank the flexibility to take action against a severe recession.
• D)Inflation targeting would make it easier for households and firms to form accurate expectations of future inflation, improving their planning and the efficiency of the economy.
• E)Inflation targeting allows the central bank to devote all of its resources to ensuring unemployment is at its natural rate.

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