According to the Taylor Rule,for a Given Inflation Rate,________

Multiple Choice

According to the Taylor rule,for a given inflation rate,________.

A) if bank reserves double, the federal funds rate should double
B) if nominal output doubles, the federal funds rate should double
C) every percentage point increase in the inflation rate increases the federal funds rate by 1.5 percentage points
D) every percentage point increase in the nominal interest rate increases the federal funds rate by 1 percentage point