In Practice, the ECB Has Committed to What Type of Strategy

question 76

Multiple Choice

In practice, the ECB has committed to what type of strategy for monetary policy?

• A)inflation targeting
• B)monetary targeting
• C)unclear as to inflation or monetary targeting
• D)exchange rate targeting

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Definitions:

Comparative Advantage

The principle that countries or entities should produce goods and services where they have a lower opportunity cost compared to others.

Domestic Opportunity Cost

The cost of forgoing the next best alternative when choosing to produce a good or service domestically.

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity.

Domestic Opportunity Cost

The cost of forgoing the next best alternative use of a country's resources when choosing to produce a particular good or service.