--%>

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 : FX Rates & The Balance of Payments The

    The Financial Account captures international fund flows due to

  • Q : Difference between

    Elucidate the differences among the frictional, structural, and cyclical forms of unemployment.

  • Q : IS-KM Model with classical supply

    discuss with the help of IS-LM model why money has no effect on output in classical supply case

  • Q : Foreign trade eliminate deficient demand

    In what respect foreign trade will be helpful in eliminating the adverse economic influences of deficient demand? Answer: Export increases the demand for services a

  • Q : Determine the marginal propensity to

    If disposable income increases from Rs. 1,000 to Rs. 1,100, savings increase by Rs. 30. Determine the marginal propensity to save and marginal propensity to consume?

  • Q : Consumer Surplus and Producer Surplus

    In a graph of competitive market in equilibrium, the net surpluses producers and consumers enjoy generally equivalents the area among the: (i) Demand and supply curve however to the left of point of the market equilibrium. (ii) Horizontal axis and a 45°line origin

  • Q : Fiscal and monetary policies in

    Explain the impact of changes in fiscal and monetary policies in curtailing inflation?

  • Q : Principles of macro economics what are

    what are the four supply factors of economic growth

  • Q : Business cycle What is meant by the

    What is meant by the term business cycle as described by economists?

  • Q : Market shift when exporting When the

    When the U.S. furniture market is primarily in equilibrium at point e on S0D0 and then Chinese manufacturers start exporting more furniture to the United States, then this market would shift towards a new equilibrium at: (1) point a. (2) point b. (3) point c. (4) poin