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.

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Definitions:

Manufacturing Cell

An arrangement of machinery and workers in which the production process is broken down into simpler steps, and all necessary equipment and staff are located close to each other to increase efficiency.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product in the most efficient and streamlined way.

Continuous Process

A production process that operates incessantly over a long period of time, allowing for the constant production of goods or delivery of services.