All of the following arguments are presented in favor of inflation targeting EXCEPT
A)it would draw attention to what the central bank can achieve in practice.
B)it would provide an anchor for inflationary expectations.
C)it would promote accountability by providing a yardstick by which policy can be measured.
D)it would reduce the lags inherent in monetary policy.

Question

Quizplus · Accepted Answer

All of the other options listed are arguments in favor of inflation targeting, but reducing the lags inherent in monetary policy is not one of them. Instead, inflation targeting may actually increase lags in policy implementation as the central bank waits for inflation data to arrive before adjusting policy.

All of the Following Arguments Are Presented in Favor of Inflation