Which of the Following Statements About Inflation Targeting Is True

question 6

Multiple Choice

Which of the following statements about inflation targeting is true?

• A)Inflation targeting by the central banks in other countries has not typically lowered inflation.
• B)Inflation targeting would not reduce the flexibility of monetary policy to address other policy goals.
• C)Inflation targeting would not allow the central bank the flexibility to take action against a severe recession.
• D)Inflation targeting would make it easier for households and firms to form accurate expectations of future inflation,improving their planning and the efficiency of the economy.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.