If a Central Bank Engages in Inflation Targeting, Then

Multiple Choice

If a central bank engages in inflation targeting, then

A) it will not change interest rates in response to output fluctuations
B) it will change interest rates aggressively as soon as inflation or output changes
C) it will lower interest rates aggressively as soon as inflation heats up
D) it will increase interest rates aggressively as soon as aggregate supply increases
E) none of the above