Which of the following statements is true about inﬂationary expectations?
A) Near-term inﬂationary expectations are less volatile than long-term inﬂationary expectations.
B) Near-term inﬂationary expectations are much more volatile than long-term inﬂationary
C) Inﬂation targets are a weak tool for controlling inﬂationary expectations.
D) The central bank's ability to keep inﬂation at target levels plays an insigniﬁcant role in

Question

Quizplus · Accepted Answer

Near-term inflationary expectations are much more volatile than long-term inflationary expectations because they are more sensitive to immediate economic news, policy changes, and other short-term factors. Long-term expectations tend to be more stable as they reflect the market's view on the central bank's ability to manage inflation over the longer term.

Which of the Following Statements Is True About Inﬂationary Expectations