Which Statement Describes the Difference Between the Taylor Rule and Inflation

question 184

Multiple Choice

Which statement describes the difference between the Taylor rule and inflation targeting?

• A) The Federal Reserve uses inflation targeting, and the Bank of England uses the Taylor rule.
• B) The Taylor rule responds to past inflation, and inflation targeting is based on a forecast of inflation.
• C) Inflation targeting responds to past inflation, and the Taylor rule is based on a forecast of inflation.
• D) Inflation targeting is used in conducting fiscal policy, while the Taylor rule is used in monetary policy.

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Definitions:

Community Resources

Various forms of support and facilities available within a community that can provide assistance and services to its members.

Displacement

In psychology, a defense mechanism where a person redirects emotional feelings, often anger, from their original source to a less threatening target.

Repressed Motives

Desires or drives that have been pushed into the unconscious because they are considered unacceptable or uncomfortable.

Substitute Object

An alternative that replaces or serves in place of an original item or concept.