Approaches to establishing central bank credibility include
A)inflation targeting.
B)exchange rate targeting.
C)central bank independence.
D)appointment of a more conservative central banker.
E)all of the above.

Question

Quizplus · Accepted Answer

All of the above approaches can be effective in establishing central bank credibility. Inflation targeting can lead to more predictable and stable inflation rates, exchange rate targeting can ensure stability in the external value of a country's currency, central bank independence can help insulate monetary policy from political pressure, and appointing a more conservative central banker can signal a commitment to maintaining price stability. However, the effectiveness of these approaches may vary depending on the specific economic and political context.

Approaches to Establishing Central Bank Credibility Include