In the New Keynesian Rational Expectations Model with a Taylor

question 16

Multiple Choice

In the New Keynesian Rational Expectations model with a Taylor rule, if the central bank follows the Taylor principle,

• A) there is no steady state.
• B) there are three steady states.
• C) there are many steady states.
• D) there are two steady states.
• E) there is one steady state.

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Definitions:

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