According to the Taylor Rule

Multiple Choice

According to the Taylor rule,

A) the Fed would have the discretion to choose an appropriate inflation rate
B) the Fed would announce targets for the inflation rate and real GDP
C) the Fed would allow the inflation rate to increase by about 0.5 percent per year
D) the Fed would allow the price level to increase by about 0.5 percent per year
E) Congress would set an annual inflation rate target.