Taylor's Simplified 1993 Rule States That

question 42

Multiple Choice

Taylor's simplified 1993 rule states that

• A) the nominal interest rate increases less than one-for-one with the inflation rate.
• B) the nominal interest rate increases one-for-one with the natural real rate of interest.
• C) the zero lower bound is irrelevant.
• D) the nominal interest rate increases one-for-one with the inflation rate.
• E) the nominal interest rate should not depend on the natural real rate of interest.

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