In the New Keynesian Rational Expectations Model with a Taylor

Multiple Choice

In the New Keynesian Rational Expectations model with a Taylor rule, if the central bank follows the Taylor principle, in the steady state in which nominal interest rate is zero,

A) the central bank hits its inflation target.
B) inflation is lower than the central bank's target.
C) inflation is higher than the central bank's target.
D) inflation is greater than zero.
E) inflation is zero.