In the New Keynesian Rational Expectations Model with a Neo-Fisherian

question 5

Multiple Choice

In the New Keynesian Rational Expectations model with a Neo-Fisherian Monetary Policy Rule,

• A) the central bank exceeds its inflation target forever.
• B) the central bank undershoots its inflation target for, at most, one period.
• C) the central bank undershoots its inflation target forever.
• D) there are two steady states.
• E) the central bank only undershoots its inflation target in the zero lower bound steady state.

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