All of the following are reasonable arguments against adopting a zero inflation target except that a zero inflation target:
A)makes the undesirable effects of deflation more likely.
B)prevents the central bank from achieving a negative real interest rate.
C)is not consistent with long-run price stability.
D)based on the CPI would not generate "true" price stability because of CPI measurement problems.

Question

Quizplus · Accepted Answer

A zero inflation target is consistent with long-run price stability, as it aims to maintain a stable price level over time.

All of the Following Are Reasonable Arguments Against Adopting a Zero