Which of the following policies is likely to enhance a central bank's credibility?
A)Announcing inflation targets
B)Appointing inflation doves as central bankers
C)Making the central bank obligated to finance the national deficit
D)Appointing central bankers for short terms that coincide with those in the legislative and executive branches of government

Question

Quizplus · Accepted Answer

Announcing inflation targets can enhance a central bank's credibility by providing clear goals and demonstrating a commitment to maintaining price stability, which can help anchor public expectations and build trust in the central bank's policies.

Which of the Following Policies Is Likely to Enhance a Central