Which Statement Is FALSE

question 110

Multiple Choice

Which statement is FALSE?

• A) The Taylor rule sets the federal funds rate on the basis of both inflation rate and output gap, whereas inflation targeting is based on a desired inflation rate.
• B) The Taylor rule sets the federal funds rate on the basis of past inflation rates, whereas inflation targeting is based on a forecast of the inflation rate.
• C) The Taylor rule can be more flexible, whereas inflation targeting provides more transparency and accountability.
• D) The Taylor rule sets the federal funds rate on the basis of only past inflation rates, whereas inflation targeting is based on a target interest rate and business cycles.

---

Definitions:

Fordism

A system of mass production that combines manufacturing with technological innovations to produce large quantities of standardized products, famously pioneered by Henry Ford.

Historical Significance

The importance assigned to an event, person, or place based on its impact on history, its representative value, or its influence on present and future conditions.

John Dewey's Pragmatism

A philosophical doctrine that emphasizes the practical application of ideas by acting on them to actually test them in human experiences.

Progressive Era

A period in the late 19th and early 20th centuries in the United States during which widespread social, political, and economic reforms were enacted in response to the problems arising from industrialization, urbanization, and corruption.