Question

Suppose the central bank in a hypothetical country Corearea uses "core" inflation for inflation targeting purposes. A sudden rise in food prices O A. makes inflation targeting harder because it is closely related to excess demand in the economy. OB. would be offset by an increase in the Corearian dollar, making this price change irrelevant. OC. is closely related to changes in core inflation, so the central bank uses it for targeting inflation O D. is irrelevant for inflation targeting because the central bank does not include the price of food in its targets for core inflation. O E. makes inflation targeting harder because it makes these problems more relevant.

Answer 1

# Since core inflation doesnot include food inflation. So sudden nire in price of food is irrelevant for in Hlation tange ting because the central bart dels not include the price in its tood in its target for care inflation Scanned with the option is correct CamScanner