The Taylor rule
A)allows for strict inflation targeting as long as the output coefficient is zero
B)should only be followed if the economy is growing strongly
C)suggests changes in money growth in response to changes in the inflation rate
D)does not allow for strict inflation targeting
E)implies a strict monetary growth rule

Question

Quizplus · Accepted Answer

The Taylor rule allows for strict inflation targeting if the output gap coefficient is set to zero, focusing solely on inflation.

The Taylor Rule