Opponents of inflation targets say that:
A)such targets encourage workers to expect a low and stable inflation rate and hold down demands for wage increases.
B)the Fed pays less attention to jobs and economic growth when it sets such targets.
C)such targets encourage firms to plan on a low and stable inflation rate and hold down price increases.
D)such targets encourage investors to plan on a low and stable inflation rate and hold down demands for interest rate increases.
E)the Fed pays more attention to jobs and economic growth when it sets such targets.

Question

Quizplus · Accepted Answer

The main criticism of inflation targets is that they can lead the Federal Reserve (or any central bank) to prioritize inflation control over other economic objectives, such as employment and growth. This means that when the Fed sets these targets, it might focus less on job creation and economic expansion.

Opponents of Inflation Targets Say That