Which of the Following Describes the Difference Between the Taylor

question 175

Multiple Choice

Which of the following 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:

Relationship

A connection, association, or interaction between two or more entities, persons, or concepts.

Correlation Coefficients

Statistical measures that describe the type and strength of the relationship between two variables.

Relationship

A link or relationship that exists among two or more people, organizations, or things.

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