Inflation Targeting Is a Policy in Which the Fed

Multiple Choice

Inflation targeting is a policy in which the Fed

A) announces an inflation target and then runs monetary policy to hit that target.
B) tries to reduce inflation by setting a low federal funds rate target.
C) tries to reduce inflation by setting a high federal funds rate target.
D) uses open market operations as a method of discretionary intervention, increasing the money supply when there is a recession, and decreasing it when there is an unsustainable economic expansion.