Which of the following is not an argument against inflation targeting?
A)Inflation targeting reduces the flexibility of the Fed to pursue other policy goals.
B)Inflation targeting assumes that the Fed can accurately forecast future inflation rates.
C)Inflation targeting makes monetary policy ineffective because the targets are publicly announced.
D)Inflation targeting holds the Fed accountable for an inflation goal,but may make it less likely the Fed will achieve other goals.

Question

Quizplus · Accepted Answer

This statement is not an argument against inflation targeting. In fact, the announcement of targets helps to increase transparency and accountability, which can enhance the effectiveness of monetary policy. A, B, and D are all commonly cited arguments against inflation targeting.

Which of the Following Is Not an Argument Against Inflation