Which of the following is true of inflation targeting?
A) it is conducted with openness rather than secrecy
B) it is a specific policy rule
C) it restricts policymakers' attention to one easily identified variable
D) it is a form of monetarism which relies on a relatively narrow interpretation of the Quantity Theory
E) though theoretically legitimate, it has not been adopted in practice by any major central banks

Question

Quizplus · Accepted Answer

Inflation targeting involves setting explicit targets for the future rate of inflation and using monetary policy tools to achieve those targets. It is characterized by transparency and openness, as central banks communicate their inflation targets and policy strategies to the public to manage expectations.

Which of the Following Is True of Inflation Targeting