which statement about inflation targeting is true? a) inflation targeting calls

Question

which statement about inflation targeting is true? a) inflation targeting calls for the Fed to set the growth rate of the money supply equal to the long-term growth rate of the economy b) advocates of inflation targeting believe the economy is inherently stable c) if the Fed pursues an inflation target, it increases the money supply when the actual inflation rate is below the target inflation rate d) if the Fed pursues an inflation taget, it does not change the money supply unless the actual or forecast infaltion rate is above the target inflation rate

Explanation / Answer

c) if the Fed pursues an inflation target, it increases the money supply when the actual inflation rate is below the target inflation rate

yes it is also the function of fed so that it can increase inflation to the level of targeted as low inflation is also bad for the economy

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