Taylor's simplified 1993 rule states that
A) the zero lower bound is irrelevant.
B) the nominal interest rate increases one-for-one with the inflation rate.
C) the nominal interest rate increases less than one-for-one with the inflation rate.
D) the nominal interest rate increases one-for-one with the natural real rate of interest.
E) the nominal interest rate should not depend on the natural real rate of interest.
Correct Answer:
Verified
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