If the monetary policy rule is given by r = 1.0 + 0.5p, then r represents ________.
A) the autonomous component of the real interest rate set by the central bank
B) the responsiveness of the real interest rate to the inflation rate
C) the real interest rate that is sent by the central bank
D) none of the above
Correct Answer:
Verified
Q2: The Bank of Canada conducts monetary policy
Q3: Because prices are slow to move in
Q4: Explain the relationship between real and nominal
Q5: If the central bank did not follow
Q6: If the central bank did not follow
Q7: Higher inflation results from higher interest rates
Q8: The Bank of Canada controls the overnight
Q9: Central banks aim to _.
A) keep inflation
Q10: The Taylor Principle differs from the Taylor
Q11: Explain the relationship between Bank of Canada's
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