Problem
1. Explain the problems associated with the choice of the money supply as an intermediate target.
2. What are the arguments for basing an inflation target on (a) RPIX and (b) RPIY?
3. Compare and contrast the merits of inflation and nominal income asmonetary policy targets.
4. Why does the ability of the MPC of the Bank of England to set its own policy horizon give it some goal independence?
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.