Announced numerical inflation targets are advocated for all of the following reasons except that announced inflation targets:
A)reduce inflation uncertainty.
B)anchor inflationary expectations.
C)enhance central bank credibility.
D)eliminate the tradeoff between maintaining output or inflation in the event of adverse inflationary shocks.

Question

Quizplus · Accepted Answer

Announced inflation targets do not eliminate the tradeoff between maintaining output or inflation during adverse inflationary shocks; they primarily aim to reduce uncertainty, anchor expectations, and enhance credibility.

Announced Numerical Inflation Targets Are Advocated for All of the Following