Chapter 31, Problem 5MCQ

To determine

The goal of central bank while implementing monetary policy

Explanation of Solution

A central banking strategy known as inflation targeting involves modifying monetary policy to attain a specific yearly rate of inflation. The goal rate is what is referred to as this and is often set between 2% and 3%. The idea behind inflation targeting is that preserving price stability, which is accomplished by reducing inflation, is the greatest way to promote long-term macroeconomic development.

Thus, from the above we can conclude that the correct option is D.