The problems of raising the level of the inflation target include

A) if the zero-lower-bound problem is rare, then the benefits of a higher inflation target are not very large.
B) the costs of higher inflation in terms of the distortions it produces in the economy are high.
C) it is more difficult to stabilize the inflation rate at a higher targeting level.
D) all of the above.

ANSWER

D) all of the above.