According to Taylor's rule,all of the following variables help explain the behavior of the federal funds rate EXCEPT
A) output gap.
B) current inflation.
C) inflation gap.
D) yield curve.

Question

Quizplus · Accepted Answer

The yield curve is not one of the variables included in Taylor's rule, which is a monetary policy guideline that suggests how central banks should set interest rates based on changes in inflation, economic growth, and other factors. The other three choices - output gap, current inflation, and inflation gap - are all key variables that are used in the rule.

According to Taylor's Rule,all of the Following Variables Help Explain