The Taylor Rule provides policymakers with a target for
A) the federal funds rate.
B) the discount rate.
C) the inflation rate.
D) the unemployment rate.
E) c and d

Question

Quizplus · Accepted Answer

The Taylor Rule provides policymakers with a target for the federal funds rate, which is the interest rate at which depository institutions lend reserve balances to other depository institutions overnight, on an uncollateralized basis. The rule is based on the relationship between the federal funds rate, inflation, and the output gap (the difference between actual GDP and potential GDP).

The Taylor Rule Provides Policymakers with a Target for