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Each of the Following Statements Describes the Behavior of the Taylor

Question 23

Multiple Choice

Each of the following statements describes the behavior of the Taylor rule, which does not belong?


A) The Taylor rule works equally well in the context of either an open or a closed economy.
B) One way for exchange rate fluctuations show up in the Taylor rule is through the behavior of Y^.
C) One way for exchange rate fluctuations show up in the Taylor rule is through the behavior of .
D) One way for exchange rate fluctuations show up in the Taylor rule is through the behavior of r.
E) The Taylor rule requires a flexible exchange rate.

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