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When Would Inflation Targeting Using Interest Rates Lead to a Recession

Question 6

Multiple Choice

When would inflation targeting using interest rates lead to a recession in an economy?


A) When the central bank publicizes its target goal for the inflation rate.
B) When inflation is inversely linked to employment.
C) When the target rate of inflation is very high.
D) When the inflation has been caused by a reduction in aggregate supply.

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