inflation targeting Directions: Be sure to make a copy of your answer before submitting it to…

inflation targetingDirections: Be sure to make a copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English spelling and grammar. Sources must be cited in APA format. Your response should be a minimum of one (1) single spaced page to a maximum of two (2) pages in length.Briefly explain what inflation targeting is and list the five (5) main elements related to it. Then discuss the four (4) advantages and three (3) disadvantages of this type of monetary policy strategy.………………………..Answer Preview……………………………Inflation targeting refers to a monetary policy where a nation’s central bank settles for a particular inflation rate as its goal. The policy makes citizens believe the prices of goods and services will keep on increasing over time, thus making them purchase them before their cost rises. In most nations, central banks set the inflation rate at 2% and it applies to the core rate. It affects the prices of food and energy due to their volatile nature. However, the core rate is does not have an instant impact on the economy. In most cases it takes between six and eighteen months to have the intended effects on prices of commodities………………………………

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