Which of the following is not an argument against inflation targeting?
A)Inflation targeting reduces the flexibility of a central bank to pursue other policy goals.
B)Inflation targeting assumes that a central bank can accurately forecast future inflation rates.
C)Inflation targeting makes monetary policy ineffective because the targets are publicly announced.
D)Inflation targeting holds a central bank accountable for an inflation goal, but may make it less likely a central bank will achieve other goals.

Question

Quizplus · Accepted Answer

This statement is not accurate, as inflation targeting does not make monetary policy ineffective because the targets are publicly announced. In fact, publicly announcing targets can increase accountability and transparency, which can be positive for the effectiveness of monetary policy. The other options are valid arguments against inflation targeting.

Which of the Following Is Not an Argument Against Inflation