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[solution] » 7. Nonactivist monetary proposals In regard to monetary policies,

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7. Nonactivist monetary proposals In regard to monetary policies,
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7. Nonactivist monetary proposals In regard to monetary policies, nonactivists have various proposals. True or False: Some nonactivists believe in the Taylor rule, which suggests that the annual money-supply growth rate should be based on the growth rates of velocity and real GDP to ensure that the price level does not fluctuate.

False True

Which of the following statements best explains the difference between the Taylor rule and the two other nonactivist rules (the constant-money growth rate rule and the predetermined-money growth rate rule)?

The Taylor rule does not take into account the current state of the economy. The Taylor rule does not take into account the stability of prices. The Taylor rule suggests how much the money supply should grow. The Taylor rule is not a derivation of the equation of exchange.

 







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