The Taylor rule uses three variables to determine the target for the cash rate. Which of the following is NOT one of those variables?

Name: The Taylor rule uses three variables to determine the target for the cash rate. Which of the following is NOT one of those variables?
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Question

Quizplus · Accepted Answer

The Taylor rule uses the output gap, equilibrium real interest rate, and inflation rate to set the target interest rate, but not the monetary base.

The Taylor Rule Uses Three Variables to Determine the Target