An inflation rate targeting rule
A) reduces uncertainty about monetary policy.
B) will not work if the Fed continues to use open market operations.
C) has been adopted by the Fed in response to the financial crisis of 2008-2009.
D) means that the inflation rate must exceed 5 percent in order for the rule to be effective.

Question

Quizplus · Accepted Answer

An inflation rate targeting rule helps to reduce uncertainty about monetary policy by providing a clear and transparent framework for monetary policy decisions, which can help anchor inflation expectations.

An Inflation Rate Targeting Rule