Question on Central Bank comunication
In a recent discussion at a Board of Directors meeting of Econometrics Inc., two statements were made regarding the importance of communication between a central bank and the financial markets. The statements were:
Statement 1: “Poor communication by central banks of their intent can lead to uncertainty, instability in the financial markets, and unanticipated policy decisions that can disrupt financial markets.”
Statement 2: “Central banks around the world should communicate clearly and transparently to the financial markets that they will preserve their policymaking flexibility when threats to price stability emerge.”
Are Statement 1 and Statement 2 as made by the Board members correct?
Statement 1 Statement 2
A) Correct Correct
B) Correct Incorrect
C) Incorrect Incorrect
D) Incorrect Correct
I am asking you in regard to statement 2.
Alex. |