Multiple Choice
If the monetary policy rule is given by r = 1.0 + 0.5p, then 0.5 represents ________.
A) the autonomous component of the real interest rate set by the central bank
B) the responsiveness of the real interest rate to the inflation rate
C) the nominal rate as described by the Taylor principle
D) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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