Which of the Following Correctly Explains the Taylor Rule

question 55

Multiple Choice

Which of the following correctly explains the Taylor rule?

• A) It links interest rates to short-term deviations in in?ation and output.
• B) It maps the changes in actual and potential GDP over time.
• C) It shows the trade-off between unemployment and in?ation.
• D) It links the growth of money supply to changes in the price level.

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