In Implementing Monetary Policy with Respect to the Taylor Rule

Multiple Choice

In implementing monetary policy with respect to the Taylor Rule:

A) the central bank is willing to tolerate a 2 percent target rate of inflation, and that the central bank should follow three rules when setting its target for the overnight lending rate.
B) the central bank is willing to tolerate a 5 percent target rate of inflation, and that the central bank should follow three rules when setting its target for the overnight lending rate.
C) the central bank is willing to tolerate any inflation rate, and overnight lending rate.
D) the central bank chooses an inflation target regardless of the economic situation.