The Taylor rule accurately predicted the changes in the federal funds target during the period
A)when Alan Greenspan was the chairman of the Federal Reserve Board.
B)when Paul Volcker was the chairman of the Federal Reserve Board.
C)when Arthur Burns was the chairman of the Federal Reserve Board.
D)when William McChesney Martin was the chairman of the Federal Reserve Board.

Question

Quizplus · Accepted Answer

The Taylor rule was developed by economist John Taylor in 1993, during the chairmanship of Alan Greenspan. It is a guideline for policymakers to set the federal funds rate based on inflation and output conditions. Therefore, during the period when Greenspan was the chairman of the Federal Reserve Board, the Taylor rule accurately predicted the changes in the federal funds target, making choice A the correct answer.

The Taylor Rule Accurately Predicted the Changes in the Federal