Having a Nominal Inflation Target for Monetary Growth Can Pose

question 75

Multiple Choice

Having a nominal inflation target for monetary growth can pose a difficulty because:

• A) inflation is very challenging to measure.
• B) inflation can be higher or lower, depending on the growth rate of real GDP.
• C) most agree that inflation targets are completely unrelated to monetary growth.
• D) monetary growth can be affected by political pressure and other noneconomic factors.

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Definitions:

Ratio

A mathematical relationship between two numbers indicating how many times the first number contains the second.

Interval

A range of values between two points, often used in reference to scales in measurements.

True Zero Point

In measurement scales, a true zero point indicates the absence of the quantity being measured, allowing for ratios to be meaningfully calculated.

Interval Level Variables

Interval level variables are a type of quantitative data where the intervals between values are meaningful, but the data lack a true zero point, allowing for the measurement of difference but not ratio.