A Central Bank That Does NOT Follow the Taylor Principle

question 85

Multiple Choice

A central bank that does NOT follow the Taylor principle will fail to raise nominal interest rates by more than the increase in expected inflation. As a result,the monetary policy curve is ________ sloping and the aggregate demand curve is ________ sloping.

• A)upward;downward
• B)downward;downward
• C)upward;upward
• D)downward;upward

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