yonex11111
New member
Suppose that, after the economy has been at full employment with low inflation for some time, the Fed begins using the "Taylor Rule" to guide its monetary policy. Then, if oil prices suddenly rise, the Fed would be obligated to:
A. Either lower or raise its interest rate target, depending on the relative weights assigned by the rule to the goals of controlling inflation or preventing recession
B. Lower its interest rate target
C. Raise its interest rate target
A. Either lower or raise its interest rate target, depending on the relative weights assigned by the rule to the goals of controlling inflation or preventing recession
B. Lower its interest rate target
C. Raise its interest rate target