The target inflation rate for many central banks is about
A)10 percent.
B)2 percent.
C)8 percent.
D)0 percent.
E)5 percent.

Question

Quizplus · Accepted Answer

The target inflation rate for many central banks is about 2 percent as it is considered to be a good balance between maintaining price stability and not impeding economic growth. A higher inflation rate can lead to decreasing purchasing power of currency and erode the value of savings, while a lower inflation rate can lead to deflation and economic stagnation.

The Target Inflation Rate for Many Central Banks Is About