Chapter 24, Problem 11Q

To determine

Case of monetary targeting strategy of Switzerland against the monetary policy rules.

Introduction:

Inflation rate refers to the rate at which general prices of the economy rises over time resulting in a fall in the purchasing power. And average inflation rate is the average of the prices of the economy that constantly rises and falls.

Monetary policies are the macroeconomic policies formulated and implemented by the central bank of the country. It. is maintained through activities such as adjustment of the interest rate, to purchase or offer government securities and by changing the amount of money, banks are required to keep in the vault.

Monetary aggregates are broad categories of all measurement of the money supply. Standardized monetary aggregate is labeled as M0, M1, M2, and M3. A proper scan of monetary aggregate leads to information of financial stability and health of the economy.