The method used by the ECB to measure inflation for meeting its objectives:

Question

Quizplus · Accepted Answer

The ECB uses the Harmonized Index of Consumer Prices (HICP) to measure inflation for meeting its objectives. This index gives equal weight to each member country, which means that it could result in a contractionary monetary policy being used in a country where inflation is already very low. This is because the index does not take into account country-specific factors that could influence inflation rates. Therefore, the ECB needs to use other indicators and judgment to make monetary policy decisions that are appropriate for each country.

The Method Used by the ECB to Measure Inflation for Meeting