Answered: Explain what inflation targeting is.…

Explain what inflation targeting is. What are the advantages and disadvantages of this type of monetary policy strategy?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter28: Monetary Policy And Bank Regulation

Section: Chapter Questions

Problem 12RQ: How is bank regulation linked to the conduct of monetary policy?

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Question

5. Explain what inflation targeting is. What are the advantages and disadvantages of this
type of monetary policy strategy?

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

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