The Taylor Rule Is an Example of

question 138

Multiple Choice

The Taylor rule is an example of

• A) an instrument rule focused on the monetary base.
• B) an instrument rule focused on the federal funds rate.
• C) a targeting rule focused on the monetary base.
• D) a targeting rule focused on the federal funds rate.

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Definitions:

Opportunity Costs

The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.

Inventory

Goods and materials that a business holds for the ultimate goal of resale or processing.

Interest Costs

The expenses incurred by borrowing money or the costs associated with the use of credit.

Multiple Discriminant Analysis

A statistical technique used to classify observations into predefined categories based on a set of predictor variables.