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Canada's adoption of inflation targeting led to an unemployment rate of ____.
A) above 10 percent
B) nearly 8 percent
C) over 5 percent
D) 5 percent
Answer: A
Diff: 1 Type: MC Page Ref: 444
Skill: Recall
Objective List: 18.2 List the advantages and disadvantages of inflation targeting
In both New Zealand and Canada, what has happened to the unemployment rate since the
countries adopted inflation targeting?
A) The unemployment rate increased sharply.
B) The unemployment rate remained constant.
C) The unemployment rate has declined substantially after a sharp increase.
D) The unemployment rate declined sharply immediately after the inflation targets were adopted.
Answer: C
Diff: 1 Type: MC Page Ref: 444
Skill: Applied
Objective List: 18.2 List the advantages and disadvantages of inflation targeting
Which of the following is an advantage of inflation targeting?
A) There is simplicity and clarity of the target.
B) Inflation targeting does not rely on a stable money-inflation relationship.
C) It is understood by the public and is transparent.
D) All of the above.
Answer: D
Diff: 1 Type: MC Page Ref: 444 - 446
Skill: Recall
Objective List: 18.2 List the advantages and disadvantages of inflation targeting
Which of the following is an advantage to inflation targeting?
A) There is a delayed signal about achievement of the target.
B) Inflation targets could impose a rigid rule on policymakers.
C) There is potential for larger output fluctuations.
D) There is transparency.
Answer: D
Diff: 1 Type: MC Page Ref: 445
Skill: Recall
Objective List: 18.2 List the advantages and disadvantages of inflation targeting