Which of the Following Is a Disadvantage of Inflation Targeting?​

question 45

Multiple Choice

Which of the following is a disadvantage of inflation targeting?​

• A)​It reduces the flexibility of the central bank.
• B)​It makes the goals of the central bank explicit.
• C)​It leads to the problem of time inconsistency.
• D)​It raises the expected inflation rate.

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Definitions:

Mean

The mean of a collection of numbers, determined by summing up all the numbers and then dividing by the total number of values.

Set of Data

A collection of values or observations, possibly in a structured format, representing information.

Median

When values in a dataset are sorted from least to greatest or the opposite, the median is the value that sits in the center.

Set of Data

A collection of related information or variables, typically numeric, organized for analysis.