The Advantage of an Explicit Inflation Target Is That

question 21

Multiple Choice

The advantage of an explicit inflation target is that:

• A)it helps anchor inflation expectations.
• B)it allows banks to set interest rates.
• C)it stabilizes employment.
• D)it raises the marginal product of capital.
• E)it completely eradicates discretionary monetary policy.

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Definitions:

Cited Advantage

A specific benefit mentioned or referenced, usually to support an argument or to highlight the superiority of a product, idea, or method.

Functional Departmentation

The organization of a company into departments based on specific functions or tasks, such as marketing, finance, or human resources.

Decentralized

A system of management where decision-making authority is distributed among various levels within the organization, rather than concentrated at a single point.

Professional Development

Continuous learning and training activities undertaken by individuals to enhance their skills, knowledge, and competencies required in their professional fields.