1) One of the factors that contributed to the success German policymakers had using a monetary targeting type policy was that
A) they used a rigid target for the money growth rate.
B) they implemented policy so their inflation rate goal was met in the short run.
C) the money target was flexible to allow the Bundesbank to concentrate on other goals as needed.
D) they rarely communicated the intentions of policy to the public in order to keep the public from panicking.
2) Which of the following is the best description of the monetary policy strategy followed by the European Central Bank (ECB)?
A) The ECB follows monetary targeting.
B) The ECB follows inflation targeting.
C) The ECB has a hybrid strategy with elements of both monetary targeting and inflation targeting.
D) The ECB has a Fed like “just do it” approach.
3) Which of the following is an advantage to money targeting?
A) There is an immediate signal on the achievement of the target.
B) It does not rely on a stable money inflation relationship.
C) It implies lack of transparency.
D) It implies smaller output fluctuations.
4) Which of the following is a disadvantage to monetary targeting?
A) It relies on a stable money inflation relationship.
B) There is a delayed signal about the achievement of a target.
C) It implies larger output fluctuations.
D) It implies a lack of transparency.