Problem
1. What benefits does a credible nominal anchor provide?
2. How does a credible nominal anchor help improve the economic outcomes that result from a positive aggregate demand shock? How does it help if a negative aggregate supply shock occurs?
3. What are the purposes of inflation targeting and how does this monetary policy strategy achieve them?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.