The Central Bank of a Country Follows the Taylor Rule

Multiple Choice

The central bank of a country follows the Taylor rule to set its interest rate.If the equilibrium real interest rate rises by 1 percentage point, all other variables remaining unchanged,​

A) the central bank should raise the nominal interest rate by 1 percentage point.
B) the central bank should lower the nominal interest rate by 1 percentage point.
C) the central bank should raise the nominal interest rate by 0.5 percentage points.
D) the central bank should lower the nominal interest rate by 0.5 percentage points.