Which One of the Following Statements Is FALSE

question 358

Multiple Choice

Which one of the following statements 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:

Ego-ideal

A component of the psyche that represents an individual's standards of perfection and aspirations.

Reality Principle

A psychoanalytic concept where the ego seeks to satisfy the id’s desires in realistic and socially appropriate ways.

Primary-process Thought

A mode of thinking primarily in the unconscious mind involving the fulfillment of wishes and desires, often irrational and without logical coherence.

Secondary-process Thought

describes the rational, conscious thought processes rooted in logic, reality, and practicality, as distinguished from primary-process thought which is more about instinctual needs and desires.