The Taylor rule describes a Fed that raises real interest rates when
A) real output falls short of potential real output.
B) interest rates fall unexpectedly.
C) inflation is expected to rise.
D) inflation rises about its targeted level.
E) both c and d.

Question

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The Answer of The Taylor rule describes a Fed that raises real interest rates when
A) real output falls short of potential real output.
B) interest rates fall unexpectedly.
C) inflation is expected to rise.
D) inflation rises about its targeted level.
E) both c and d.

The Taylor Rule Describes a Fed That Raises Real Interest