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To Get Around the Problems of Information Lag and Impact

Question 19

Multiple Choice

To get around the problems of information lag and impact lag, Alan Greenspan led the Fed in using which of these methods for a period of nearly 20 years, and with what results?


A) Greenspan used explicit inflation targeting and met many inflation goals; inflation stayed relatively low and recessions were modest.
B) Greenspan used implicit inflation targeting to stop inflation before it began; inflation stayed relatively low and recessions were modest.
C) Greenspan used implicit inflation targeting to stop inflation before it began; inflation was relatively high, nonetheless.
D) Greenspan used explicit inflation targeting but met few inflation goals; inflation was relatively high.

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