the economics of money, banking, and financial markets

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9. 
   

   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) It increases accountability of the central bank.
   Answer: D
   Diff: 1 Type: MC Page Ref: 444 - 446
   Skill: Recall
   Objective List: 18.2 List the advantages and disadvantages of inflation targeting

   
   


10. 
    

    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) The performance has been quite good.
    Answer: D
    Diff: 1 Type: MC Page Ref: 444 - 446
    Skill: Recall
    Objective List: 18.2 List the advantages and disadvantages of inflation targeting

    
    


11. 
    

    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) It is easily understood by the public.
    Answer: D
    Diff: 1 Type: MC Page Ref: 444 - 446
    Skill: Recall
    Objective List: 18.2 List the advantages and disadvantages of inflation targeting

    
    


12. 
    

    Which of the following is a disadvantage of inflation targeting?
    A) There is transparency.
    B) Inflation targeting does not rely on a stable money-inflation relationship.
    C) It imposes a rigid rule.
    D) Inflation targeting reduces the effects of inflation shocks.
    Answer: C
    Diff: 1 Type: MC Page Ref: 447
    Skill: Recall
    Objective List: 18.2 List the advantages and disadvantages of inflation targeting