Central Banks Tend to Target Inflation Rates Above Zero for Each

Multiple Choice

Central banks tend to target inflation rates above zero for each of the following reasons EXCEPT

A) positive inflation allows real wages to fall in some industries.
B) counteracting negative shocks with a negative real interest rate requires inflation greater than zero.
C) having an inflation target of zero increases the risk that the economy will experience deflation.
D) workers resist cuts in their nominal wages.
E) lower inflation would raise the GDP growth ratE.