The Taylor rule is a description of how the central bank's targeted real interest depends on the gap
A) between the current inflation rate and the central bank's targeted inflation rate.
B) between the current unemployment rate and the central bank's targeted unemployment rate.
C) between the current inflation rate and the central bank's targeted unemployment rate.
D) between the current exchange rate and the central bank's targeted exchange rate.

Question

Quizplus · Accepted Answer

The Taylor rule describes how a central bank should adjust its interest rates in response to changes in economic conditions, specifically focusing on the gap between the current inflation rate and the central bank's target inflation rate, among other factors.

The Taylor Rule Is a Description of How the Central