Taylor's Simplified 1993 Rule States That

Multiple Choice

Taylor's simplified 1993 rule states that

A) the zero lower bound is irrelevant.
B) the nominal interest rate increases one-for-one with the inflation rate.
C) the nominal interest rate increases less than one-for-one with the inflation rate.
D) the nominal interest rate increases one-for-one with the natural real rate of interest.
E) the nominal interest rate should not depend on the natural real rate of interest.