All of the Following Arguments Are Made Against Inflation Targeting

question 87

Multiple Choice

All of the following arguments are made against inflation targeting EXCEPT

• A)rigid numerical targets would diminish the flexibility of monetary policy.
• B)the Fed would need to depend on future forecasts of inflation since monetary policy acts with a lag.
• C)the Fed has little influence on inflation.
• D)Holding the Fed accountable for low inflation may make it difficult for elected officials to monitor whether the Fed is supporting good overall economic policy.