Which of the following reduces the effectiveness of inflation targeting as a means of reducing cyclical fluctuations in the economy?        A) People increasingly believe that the rate of inflation affects the level of real output. B) Oil prices become more stable. C) Goodhart's Law, as applied to inflation targets, breaks down. D) The trade-off between inflation and unemployment (and output) virtually disappears.

MACROECONOMICS FOR TODAY
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Chapter17: The Philips Curve And Expetactions Theory
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Which of the following reduces the effectiveness of inflation targeting as a means of reducing cyclical fluctuations in the economy?     

 

A) People increasingly believe that the rate of inflation affects the level of real output.

B) Oil prices become more stable.

C) Goodhart's Law, as applied to inflation targets, breaks down.

D) The trade-off between inflation and unemployment (and output) virtually disappears.

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