If a Central Bank Sets an Explicit Inflation Target, the Central

question 42

Multiple Choice

If a central bank sets an explicit inflation target, the central bank must:

• A)Put more emphasis on the interest rate target and less on a money target
• B)Shift its focus entirely to a nominal interest rate target
• C)Give up control of targeting the monetary base
• D)Be willing to live with more volatility in the interest rate

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Definitions:

Buyers and Sellers

Parties engaged in the exchange of goods or services for money or other compensation within a market.

Manufacturer's Sales Office

A dedicated office space where the manufacturer’s sales activities, including contact with clients and order processing, are conducted.

Carries Inventory

Refers to a company's practice of keeping stock of goods or materials to meet demand.

Sales Function

The activities and processes involved in promoting and selling goods or services.