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Federal Reserve Bank of Boston Economic Quiz

Inflation Targeting 1. New Zealand began targeting inflation in 1990, and it has since been adopted by numerous other central banks in both industrialized and developing countries. Which of the following countries does not currently target inflation explicitly? A) Canada B) United States C) Peru D) South Africa E) Czech Republic 2. All inflation targeting countries: A) Target headling inflation B) Adopted inflation targeting as a means to disinflate C) Are industrialized countries D) Have a quantitative inflation target as their primary monetary policy objective E) None of the above 3. True or False: A country’s inflation target can change over time: A) True B) False 4. What is true about the measures that have been used to hold the central bank accountable to its inflation targeting commitment? A) They include fining monetary policy committee members B) They have become less formal over time C) Accountability arrangements change frequently D) They are uniform across inflation targeting countries E) The include firing the governor of the central bank 5. Due to the forward-looking nature of the inflation targeting commitment, these central banks are characterized by a high degree of transparency. Which of the following elements are communicated to the public by inflation targeting central banks? A) Voting records of monetary policy committee members B) Fan charts of inflation outcomes C) Minutes of monetary policy committee meetings D) Announcement of monetary policy decisions E) All of the above 6. How many inflation targeting countries to date have abandoned inflation targeting as a monetary policy approach? A) 7 B) 4 C) 3 D) 1 E) 0 Created with QuizScript

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Economic quiz written by: Teresa Foy - September 2006