In the Taylor Rule, If the Output Coefficient ? Is

question 9

Multiple Choice

In the Taylor rule, if the output coefficient ? is set to zero, then the central bank

• A)is mostly concerned with maintaining full employment
• B)always sets interest rates 2% above its inflation target
• C)will aggressively lower interest rates as soon as output declines
• D)engages in strict inflation targeting
• E)none of the above

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