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A Potential Problem with Adopting an Inflation-Control Target I

Question 1

Multiple Choice

A potential problem with adopting an inflation-control target i.is that the Reserve Bank will raise interest rates and push the economy into recession.
Ii) is that it provides an anchor for future expectations of inflation.
Iii) is that Reserve Bank policy actions are hidden from financial markets.


A) i and ii
B) iii only
C) i only
D) ii only
E) None of the above answers is correct.

Correct Answer:

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