Question

A country that uses a Taylor rule must also commit to a managed float exchange rate regime.?

True or false?

Answer 1

A country that uses a Taylor rule must also commit to a managed float exchange rate regime.?

True

In financial matters, a Taylor rule is a lessened shape guess of the responsiveness of the ostensible interest rate, as set by the national bank, to changes in expansion, yield, or other monetary conditions. Specifically, the run portrays how, for every one-percent expansion in inflation, the national bank tends to raise the ostensible interest rate by in excess of one rate point. This part of the lead is frequently called the Taylor rule. Albeit such standards may fill in as compact, spellbinding intermediaries for national bank arrangement, they are not expressly prescriptively considered by national banks when setting ostensible rates.