Assuming the simple Taylor rule for dictating the federal funds rate,when the actual federal funds rate deviates from the suggested rate,it can be explained by:
A)bad monetary policy.
B)discretionary fiscal policy.
C)discretionary monetary policy.
D)poorly informed monetary policy.
E)poorly informed fiscal policy.

Question

Quizplus · Accepted Answer

The deviation from the suggested federal funds rate can be explained by discretionary monetary policy, which is when the central bank uses its discretion to set interest rates based on its assessment of current economic conditions, rather than following a strict formula such as the Taylor rule.

Assuming the Simple Taylor Rule for Dictating the Federal Funds