Under inflation targeting,a central bank must pursue policies that
A) keep the inflation rate at a target value of zero.
B) keep the inflation rate at some specific target value.
C) keep the inflation rate within a specific target range.
D) lower the inflation rate, provided this can be done without raising the unemployment rate above a specified target value.

Question

Quizplus · Accepted Answer

Under inflation targeting, a central bank must pursue policies that keep the inflation rate within a specific target range. This range is usually set by the government or the central bank itself and can vary from country to country. The aim is to maintain price stability while also supporting sustainable economic growth and employment. By keeping inflation within a target range, policymakers can help reduce uncertainty and create a more stable macroeconomic environment.

Under Inflation Targeting,a Central Bank Must Pursue Policies That