Question
A policy of inflation targeting acts as an automatic stabiliser in the economy, just like automatic fiscal stabilisers. This statement is. a. True, because inflation
A policy of inflation targeting acts as an automatic stabiliser in the economy, just like automatic fiscal stabilisers. This statement is.
a. True, because inflation targeting and fiscal stabilisers are essentially the same policy tool.
b. True, because a recessionary gap is met with an expansionary monetary policy.
c. True, because an inflationary gap is met with a contractionary monetary policy.
d. Not true, because inflation targeting automatically maintains inflation within the target range, whereas fiscal stabilisers require government policy decisions.
e. Not true, because inflation targeting requires active policy decisions by the Bank of Canada, whereas automatic fiscal stabilisers need no policy implementation.
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