According to the Taylor Rule

Multiple Choice

According to the Taylor rule:

A) if inflation is equal to target inflation, the central bank should set the real interest rate equal to zero.
B) if inflation is equal to target inflation, the central bank should set the nominal interest equal to its short- run value.
C) the central bank should not care about the unemployment rate.
D) if inflation is equal to target inflation, the central bank should set the real interest rate equal to its medium- run value.
E) if inflation is equal to target inflation, the central bank should set the nominal interest rate equal to its medium- run value.