In practice,inflation targeting is better considered operating with constrained discretion rather than according to a policy rule because central banks with inflation targets typically:
A) are not allowed to adjust the target in the event of shocks.
B) set the inflation target as a range rather than as a particular number.
C) are not held accountable for achieving their target.
D) must achieve their target regardless of economic conditions.

Question

Quizplus · Accepted Answer

Central banks often set an inflation target as a range to allow flexibility in responding to economic shocks and changing conditions, reflecting a constrained discretion approach rather than a strict policy rule.

In Practice,inflation Targeting Is Better Considered Operating with Constrained Discretion