The decision by the Bank of Canada and many other central banks to target the rate of inflation partly reflects the evidence of the

Question

Quizplus · Accepted Answer

The decision to target the rate of inflation reflects the long-run neutrality of money, as changes in the money supply are believed to have only temporary effects on the economy in the long run. By targeting a low and stable rate of inflation, central banks aim to create a stable and predictable monetary environment that supports long-term growth and investment. The other answer choices are not directly related to the rationale for targeting inflation.

The Decision by the Bank of Canada and Many Other