If inflation is very high, say 50 or 100 percent a year, monetary policymakers will shift their focus to controlling:
A)The long-term interest rate
B)The short-term interest rate
C)The exchange rate
D)Money growth

Question

Quizplus · Accepted Answer

When inflation is very high, monetary policymakers will shift their focus to controlling money growth. This is because high inflation is typically caused by an excessive growth in the money supply, and reducing the growth rate of money supply can help bring inflation under control. Additionally, controlling interest rates or exchange rates may not be effective in controlling inflation in the short run, as they may simply lead to other problems in the economy.

If Inflation Is Very High, Say 50 or 100 Percent