Which describes the difference between the Taylor rule and inflation targeting? A)The Taylor rule responds to past inflation, and inflation targeting is based on a forecast of inflation. B)The Federal Reserve uses inflation targeting, and the Bank of England uses the Taylor rule. C)Inflation targeting responds to past inflation, and the Taylor rule is based on a forecast of inflation. D)Inflation targeting is a strategy used in conducting fiscal policy, while the Taylor rule is used in monetary policy.

Inflation targeting is a framework for conducting monetary policy that involves the central bank…

Answered: Which describes the difference between…

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter15: Monetary Policy

Section: Chapter Questions

Problem 8QP

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Which describes the difference between the Taylor rule and inflation targeting?
	A)	The Taylor rule responds to past inflation, and inflation targeting is based on a forecast of inflation.
	B)	The Federal Reserve uses inflation targeting, and the Bank of England uses the Taylor rule.
	C)	Inflation targeting responds to past inflation, and the Taylor rule is based on a forecast of inflation.
	D)	Inflation targeting is a strategy used in conducting fiscal policy, while the Taylor rule is used in monetary policy.

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