A central feature of monetary policy strategies in all countries is the use of a nominal variable that monetary policymakers use as an intermediate target to achieve an ultimate goal such as price stability. Such a variable is called a nominal

Question

Ishaan Esparza

Mathematics

24 January, 18:28

A central feature of monetary policy strategies in all countries is the use of a nominal variable that monetary policymakers use as an intermediate target to achieve an ultimate goal such as price stability. Such a variable is called a nominal

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Answers (2)

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Wade Charles · Answer 1

Step-by-step explanation:

Base on the scenario been described in the question, where they said a country uses central features for monetary policy strategy for nominal variable is Know as " Nominal anchor ".

We can define nominal anchor as a constraint set on the value of domestic money, and in some several cases it is a important tool used in monetary policy regimes that are very successful.

Rodney Waters · Answer 2

Nominal anchor

Step-by-step explanation:

A nominal anchor is a nominal variable such as the inflation rate or the money supply, it achieves price stability by tying down price levels. It provides conditions for tying down prices. It promoted stability in prices by keeping inflation expectations low. An Example of nominal anchor is target inflation rate or target money supply

three types of nominal anchors are:

1. the exchange rate anchor,

2. inflation anchor and

3. monetary aggregates anchor