Which of the following statements is true about the RBA's inflation target?
A) The RBA has a zero inflation target.
B) The RBA has an explicit target of 2- 3 percent inflation over the course of the business cycle.
C) The RBA has an explicit upper bound of 3 percent inflation at all times.
D) The RBA has a crawling inflation target.
E) The RBA has an implicit target for inflation, that is not revealed to the general public.

Question

Quizplus · Accepted Answer

The RBA has an explicit target of 2-3 percent inflation over the course of the business cycle, as stated in their Statement on the Conduct of Monetary Policy. This means that they aim to keep inflation within this range on average over time, and may tolerate higher or lower inflation in the short term as long as it is consistent with achieving this target in the long run.

Which of the Following Statements Is True About the RBA's