A Central Bank Operating with Discretion Can Achieve the Same

question 25

Multiple Choice

A central bank operating with discretion can achieve the same outcome as the central bank committed to a fixed rule of zero inflation if:

• A) there are no inside lags.
• B) there are no outside lags.
• C) the central bank dislikes unemployment much more than inflation.
• D) the central bank dislikes inflation much more than unemployment.