Each of the following statements about the principles underlying the Taylor rule is true except
A) the Fed desires to minimize inflation deviation from its target level.
B) the Fed desires to minimize real output fluctuations.
C) the Fed desires to minimize unemployment fluctuations.
D) the Fed desires to minimize interest rate fluctuations.
E) the Fed desires to minimize inflation fluctuations.

Question

Quizplus · Accepted Answer

The Taylor rule primarily focuses on stabilizing inflation around a target level and minimizing the gap between actual and potential output. It does not specifically aim to minimize interest rate fluctuations; rather, interest rates are adjusted as a means to achieve the other objectives.

Each of the Following Statements About the Principles Underlying the Taylor