Which of the following statements is untrue?
A) Unless a country dollarizes or uses a common currency or a currency board, a successful long-run monetary policy requires flexible exchange rates, inflation targets, and a monetary policy rule.
B) The Taylor rule includes an implicit, or indirect, real exchange rate effect on the interest rate.
C) Countries adopting a Taylor rule approach to monetary policy experienced reduced real GDP fluctuations.
D) Countries adopting a Taylor rule approach to monetary policy experienced constant inflation behavior throughout the 1980s and 1990s.
E) Countries utilizing monetary policy rules similar to the Taylor rule experienced improved macroeconomic behavior.
Correct Answer:
Verified
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