The Taylor rule is an example of:
A)a non-discretionary rule.
B)a discretionary policy.
C)a hybrid-part rule, part discretion.
D)neither a rule nor a discretionary policy.

Question

The Taylor rule is an example of:
A)​a non-discretionary rule.
B)​a discretionary policy.
C)​a hybrid-part rule, part discretion.
D)​neither a rule nor a discretionary policy.

Quizplus · Accepted Answer

The Taylor rule is considered a hybrid because it provides a systematic method for adjusting interest rates in response to changes in economic conditions (like inflation or output gaps), but it also allows for some discretion in its application by central banks.

The Taylor Rule Is an Example Of