Inflation targeting is a framework for carrying out monetary policy whereby the central bank:

Question

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In inflation targeting, central bank commits to achieving a publicly announced level of inflation. This means that the central bank sets a target level of inflation and communicates that target to the public. The bank then adjusts its monetary policy tools, such as interest rates, to achieve the target level of inflation. By doing so, the central bank aims to anchor inflation expectations and maintain price stability, which is believed to promote sustainable economic growth.

Inflation Targeting Is a Framework for Carrying Out Monetary Policy