With inflation targeting, the Federal Reserve would be required to announce its targeted band for:
A) Unemployment
B) Economic growth
C) Changes in the price level
D) Changes in the rate of taxation

Question

Quizplus · Accepted Answer

Inflation targeting is a monetary policy framework in which a central bank sets a target for the rate of inflation and then adjusts its monetary policy tools to achieve that target. Therefore, the target band for inflation is what the Federal Reserve would be required to announce. The other choices listed - unemployment, economic growth, and changes in the rate of taxation - are not directly related to inflation targeting as a policy tool.

With Inflation Targeting, the Federal Reserve Would Be Required to Announce