Inflation Targeting
1) The type of monetary policy that is used in Canada, New Zealand, and the United Kingdom is
A) monetary targeting.
B) inflation targeting.
C) targeting with an implicit nominal anchor.
D) interest rate targeting.
2) Which of the following is NOT an element of inflation targeting?
A) A public announcement of medium term numerical targets for inflation
B) An institutional commitment to price stability as the primary long run goal
C) An information inclusive approach in which only monetary aggregates are used in
making decisions about monetary policy
D) Increased accountability of the central bank for attaining its inflation objectives
3) The first country to adopt inflation targeting was
A) the United Kingdom.
B) Canada.
C) New Zealand.
D) Australia.
4) In both New Zealand and Canada, what has happened to the unemployment rate since the countries adopted inflation targeting?
A) The unemployment rate increased sharply.
B) The unemployment rate remained constant.
C) The unemployment rate has declined substantially after a sharp increase.
D) The unemployment rate declined sharply immediately after the inflation targets were adopted.