Which of the following is a statement that would be made by an opponent of inflation targets?
A) Inflation targets encourage workers to plan on a low and stable inflation rate and to hold down demands for wage increases.
B) Inflation targets will lead the Bank of Canada to pay less attention to jobs and economic growth.
C) Inflation targets encourage firms to plan on a low and stable inflation rate and to hold down price increases.
D) Inflation targets encourage investors to plan on a low and stable inflation rate and to hold down demands for interest rate increases.

Question

Which of the following is a statement that would be made by an opponent of inflation targets?  
A) Inflation targets encourage workers to plan on a low and stable inflation rate and to hold down demands for wage increases. 
B) Inflation targets will lead the Bank of Canada to pay less attention to jobs and economic growth. 
C) Inflation targets encourage firms to plan on a low and stable inflation rate and to hold down price increases. 
D) Inflation targets encourage investors to plan on a low and stable inflation rate and to hold down demands for interest rate increases.

Quizplus · Accepted Answer

An opponent of inflation targets would argue that by focusing solely on maintaining a low and stable inflation rate, the Bank of Canada may pay less attention to other important economic factors such as job growth and overall economic growth.

Which of the Following Is a Statement That Would Be