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Researchers Including a Real Exchange Rate Term in the Taylor

Question 28

Multiple Choice

Researchers including a real exchange rate term in the Taylor rule such that r = p + dp - p*) + BY^ + R* - aEP/PW) have found that, for the Germany and Japan, a is


A) positive.
B) negative.
C) equal to zero.
D) impossible to calculate.
E) undefined.

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