The predictions of Fed behavior provided by the Taylor rule are:
A)never accurate.
B)seldom accurate.
C)reasonably accurate.
D)extremely accurate.

Question

Quizplus · Accepted Answer

The Taylor rule, which provides guidelines for how central banks like the Federal Reserve should alter interest rates in response to changes in economic conditions, is generally considered to provide reasonably accurate predictions of Fed behavior. It is not perfect, but it has been a useful tool for economists and policymakers.

The Predictions of Fed Behavior Provided by the Taylor Rule