--%>
Assignment Help - homework help

FED targeting the interest rate versus inflation

What is the main difference between FED targeting the interest rate versus inflation and which one is Bernanke using nowadays? Name some countries which use this method nowadays.

E

Expert

Verified

Interest rate targeting refers to adjustment of money supply through open market operations so that the interest rate (mostly the fed funds rate) remains constant, whereas inflation targeting refers to periodic adjustments to the Fed funds rate target to keep inflation under control or within a preferred range. Bernanke is using inflation targeting today. A few countries that use this method today include Australia, Brazil, UK, Canada, South Korea, Egypt, etc.

   Related Questions in Macroeconomics

  • Q : The failure of the Supercommittee

    Question: Some commentators have argued that the failure of the "Supercommittee" is good thing for the economy?  Do you argree? Answer:

    Q : How central bank reduce the

    Describe any two measures by which a Central Bank can attempt to decrease the gap. Answer: Central bank can decrease this gap by adopting two measures illustrated b

    		•
  • Q : Why value of multiplier is low In poor

    In poor countries people spend a big percentage of their income so that APC and MPC are high. Yet, the value of multiplier is low. Explain why?

    		•
  • Q : Type of market when people cannot buy

    Whenever people can’t purchase all of a good they are willing and capable to pay for at present market price, there is surely a market: (1) Price ceiling. (2) Price floor. (3) Shortage. (4) Anomaly.  (5) Surplus. Please

    		•
  • Q : Income approach to evaluate national

    Explain in short the income approach to evaluate national income. Answer: Under income method to compute the National Income, the steps given below have been taken into account: A) First of all production units tha

    		•
  • Q : GDP In calculating the GDP national

    In calculating the GDP national income accountants:

    		•
  • Q : State the Income Effect Can someone

    Can someone please help me in finding out the accurate answer from the following question. The Income effects are: (i) Adjustments people make since the purchasing power of the given income is modified whenever prices change. (ii) Adjustments people make since the pur

    		•
  • Q : Liability of tax problem If the

    If the liability to give a tax is on one person and the burden of tax fall on some other person, state the kind of tax? Answer: These are indirect taxes like sales

    		•
  • Q : Profit sharing plan For the firm, the

    For the firm, the major goal of profit sharing plans is to:

    		•
  • Q : Base of categorizing receipts into

    What is the base of categorizing receipts into revenue and capital receipts?

    		•