Chapter 17, Problem 7AA

To determine

To choose:The suitable word that best completes the sentence.

Explanation of Solution

The suitable word that best completes the sentence is adapt.

When an economy moves gradually to an inflation that has been predicted previously, it is easy for the economy to adapt to it. Monetarists believe that by applying strict targets for inflation and unemployment rate, a steady growth in economy is maintained. When economy grows steadily, it adapts to all the changes.

Economics Concept Introduction

Introduction:

Inflation targeting- Inflation targeting is a possible policy by central bank in which the head of the central bank is provided a target of specific annual rate for inflation. This specific target is provided so that the head of the central bank can design other processes to meet that target.