Which of the following statements is false with regard to Taylor rule?
A) The central bank sets the interest rate at io, when the real output (Y) is equal to the potential output (YP) .
B) The central bank increases the interest rate, when the real output (Y) is less than the potential output (YP) .
C) The central bank decreases the interest rate, when the real output (Y) is less than the potential output (YP) .
D) The central bank increases monetary base through open market purchases of securities, when the real output (Y) is less than the potential output (YP) .
Correct Answer:
Verified
Q74: Suppose that the demand for money base
Q75: During the 1990s the main tool used
Q76: By transferring government deposits between accounts in
Q77: Interest rates are adjusted as part of
Q78: Based on a Taylor rule, which of
Q80: If a central bank does not follow
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents