Proponents of inflation targeting generally think that
A)the economy will have fewer, shorter, and less severe business cycles if the Fed holds the rate of inflation to low, targeted levels from year to year.
B)low interest rates are inflationary and high interest rates are deflationary.
C)fiscal policy is more effective in stabilizing the economy than monetary policy.
D)the Fed should strive to achieve zero inflation.

Question

Quizplus · Accepted Answer

Proponents of inflation targeting believe that maintaining low and stable inflation helps to reduce the frequency and severity of business cycles, leading to a more stable economic environment.

Proponents of Inflation Targeting Generally Think That