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Explain how the statement by the FOMC in 2012 that an annual inflation rate of...

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Accounting

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Explain how the statement by the FOMC in 2012 that an annual inflation rate of 2 percent over the long run is consistent with its mandate can help the Federal Reserve fulfill that mandate. Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s). click the box once to place a check mark. For incorrect answer(s), click the option twice to empty the box. ? Announcing a target indicates the independence of the Fed. 7 A credible central bank rarely keeps inflation near its target ? Inflation expectations Inform firms' pricing and wage decisions, therefore firm decisions support the inflation target time consistent. 7 Announcing a target raises the cost of reneging on the commitment, making the pollicy s ? The Fed statement indicates the political leaders are supportive of the policy. The Fed statemen on inflation expectations helps anchor inflationary expectations

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