Inflation targeting is a framework for carrying out monetary policy whereby
A)the central bank adopts a rigid target for inflation and ignores declines in output.
B)the central bank commits to achieving a publicly announced level of inflation.
C)the central bank commits to achieving a target level of inflation which is never announced publicly.
D)the central bank commits to a monetary growth rule.

Question

Quizplus · Accepted Answer

Inflation targeting involves the central bank publicly announcing a target level of inflation that it commits to achieving through its monetary policy decisions. This framework allows for transparency and accountability in monetary policy, as the central bank's actions can be evaluated in the context of whether or not they are likely to achieve the inflation target.

Inflation Targeting Is a Framework for Carrying Out Monetary Policy