Question

What is inflation targeting?

A. Committing the central bank to achieve an unannounced level of inflation
B. A policy that attempts to reduce inflation to zero
C. A target that links the Feds target for the federal funds rate to inflation

Answer 1

option A

Step-by-step explanation:

Inflation targeting is a policy of central bank that target the bank to achieve rate of inflation.

in this policy, central bank differentiate current inflation rate with future forecast inflation and suggested some appropriate adjustment to correct it.

2 thing that required in inflation targeting are:

- central bank monitory policy

- willingness of monitory authority not to touch other factors like wages, or exchnagee rate etc.