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.
Answer: D
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Domestic producers might oppose free trade agreements because
A. there could be a decrease in producer surplus. B. there could be an increase in consumer surplus. C. there could be an increase in producer surplus. D. there could be a decrease in consumer surplus.
A privately owned monopoly will NEVER produce along a range of output for which
A) the demand curve is elastic. B) the demand curve is inelastic. C) the price elasticity of demand is greater than 1. D) the price elasticity of supply is greater than 1.
If there is no single strategy that is best regardless of other players’ behavior:
A. there is no dominant strategy. B. the dominant strategy will be to defect. C. a noncooperative equilibrium is the only possible outcome. D. the game is called a Prisoners’ dilemma.
Which of the following is a property of an isoquant?
a. It is concave to the origin. b. Its slope is given by the ratio of the marginal products, for example, (marginal product of capital) ÷ (marginal product of labor), where capital and labor are measured on the Y and X-axes respectively. c. It gives the lowest-cost way of producing a certain level of output. d. Isoquants cannot intersect each other.