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If Monetary Authorities Apply a "Taylor Rule

Question 30

Multiple Choice

If monetary authorities apply a "Taylor rule":


A) short-term interest rates are manipulated to meet a long-run inflation target that is consistent with full employment
B) an unchanging rate of growth in the money supply would be adopted
C) a series of monetary shocks are delivered to the economy to either speed it up or slow it down
D) the Federal Open Market Committee would as a rule always consult with economist John Taylor before implementing changes to monetary policy
E) monetary policy would have to accommodate federal deficits as a rule

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