"Targeting the forecast" is the policy that best describes which of the following views?
A) real-business-cycle theory
B) rational expectations theory
C) market monetarism
D) the Keynesian view

Question

Quizplus · Accepted Answer

Market monetarism emphasizes the role of central banks in stabilizing the economy by targeting nominal GDP or the forecast of nominal GDP. This approach suggests that by focusing on the expected path of nominal GDP, central banks can effectively manage inflation and economic stability, distinguishing it from the other theories listed.

"Targeting the Forecast" Is the Policy That Best Describes Which