Many Central Banks Have Established Formal Targets for the Rate

Multiple Choice

Many central banks have established formal targets for the rate of inflation because of the following fundamental observations about economic relationships: 1.There are high costs associated with inflation.
2.High inflation causes high unemployment.
3.Monetary policy is the cause of sustained inflation.

A) 1 only
B) 2 only
C) 3 only
D) 1 and 3 only
E) 1,2,and 3