Inflation targeting consists of the Federal Reserve O using monetary policy to reduce the annual inflation rate by a set amount each year until the rate of inflation is negative O using monetary policy to hold the price of a fixed basket of commodities (wheat, gold) to a 5-6 percent annual rate regularly stating an explicit goal for the rate of inflation over some future period, such as 2 percent inflation over the next two years O identifying the sources of inflation and recommending structural changes in the economy that would relieve upward price pressures
Inflation targeting consists of the Federal Reserve O using monetary policy to reduce the annual inflation rate by a set amount each year until the rate of inflation is negative O using monetary policy to hold the price of a fixed basket of commodities (wheat, gold) to a 5-6 percent annual rate regularly stating an explicit goal for the rate of inflation over some future period, such as 2 percent inflation over the next two years O identifying the sources of inflation and recommending structural changes in the economy that would relieve upward price pressures
Chapter17: The Trade-off Between Inflation And Unemploy
Section: Chapter Questions
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