The monetary policy strategy that relies on a stable money-income relationship is
A)exchange-rate targeting.
B)monetary targeting.
C)inflation targeting.
D)the implicit nominal anchor.

Question

Quizplus · Accepted Answer

The monetary policy strategy that relies on a stable money-income relationship is monetary targeting. This approach aims to stabilize the growth rate of money in order to anchor inflation expectations and promote economic stability. Exchange-rate targeting focuses on maintaining a specific exchange rate level, while inflation targeting aims to keep inflation within a target range. The implicit nominal anchor refers to the idea that a central bank's credibility and reputation for price stability serves as an implicit anchor for inflation expectations.

The Monetary Policy Strategy That Relies on a Stable Money-Income