Which of the following is not an advantage of inflation targeting?
A) There is simplicity and clarity of the target.
B) Inflation targeting does not rely on a stable money-inflation relationship.
C) There is an immediate signal on the achievement of the target.
D) Inflation targeting reduces the effects of inflation shocks.

Question

Quizplus · Accepted Answer

Inflation targeting does not provide an immediate signal on the achievement of the target because monetary policy actions affect inflation with a lag.

Which of the Following Is Not an Advantage of Inflation