Which of the scenarios best reflects the meaning of the term inflation targeting?
A) A local shopping mall offers an "inflation discount," which compensates for the recent increase in prices, in the hopes of targeting savvy consumers.
B) Hoping to reduce inflation to improve public opinion, the Federal Reserve decides to lower interest rates.
C) A central bank is expected to achieve a 3% annual inflation rate.
D) In anticipation of the upcoming election, the chairman of the Federal Reserve lowers interest rates, hoping to win support for the incumbent president.
Ans: C) A central bank is expected to achieve a 3% annual inflation rate.
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a. True b. False Indicate whether the statement is true or false