Question
What is a good Opinion about the information below Some argue that the Federal Reserve Bank should primarily focus on inflation mitigation. They maintain controlling
What is a good Opinion about the information below
Some argue that the Federal Reserve Bank should primarily focus on inflation mitigation. They maintain controlling the economic growth rate remains of utmost importance. Ideally, it should fall between 2 percent-3 percent ( Vredin , 2015). Any deviation from the said figure would lead to increased demand for goods and services without the needed supply. Thus, it leads to inflation. Besides, they concur that inflation control makes it comprehensible to formulate monetary policies that would stimulate economic growth. Opponents of this school of thought are skeptical of targeted inflation control. The government, in their view, should focus on Nominal National Income, which incorporates currency exchange rates. It is adopting the long view rather than targeted inflation control, which takes place over a shortened period. Also, inflation targeting inadvertently leads to cost-push inflation ( Vredin , 2015). Therefore, governments are discouraged from engaging in such risky fiscal maneuvers. The Bank of England in the United Kingdom sets the ideal inflation rate at 2 percent ( Champroux , 2016). Champroux (2016) asserts that the Monetary Policy Committee derives it. It engages in advising the government to adopt privatization and minimal regulation to spur production. The Bank of England does this to alleviate inflation from the supply side. By assessing vital economic indicators, the bank can either adjust interest rates upwards or downwards to keep inflation in check .
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