The type of monetary policy that is used in Canada,New Zealand,and the United Kingdom is
A)monetary targeting.
B)inflation targeting.
C)targeting with an implicit nominal anchor.
D)interest-rate targeting.

Question

Quizplus · Accepted Answer

The correct type of monetary policy used by Canada, New Zealand, and the United Kingdom is inflation targeting. In inflation targeting, the central bank sets an explicit target for the inflation rate and adjusts its monetary policy tools, such as interest rates and money supply, to achieve the target inflation rate. This approach is preferred by many central banks because it provides a clear and transparent framework for conducting monetary policy and helps anchor inflation expectations, which can lead to more stable prices and economic growth.

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