Since 2010, the federal funds rate has been well below the rate ...

[tiara099]

Since 2010, the federal funds rate has been well below the rate suggested by the Taylor rule. A likely explanation for the discrepancy is that ________.
 
  A) the Fed's dual mandate prevents a close reliance on the Taylor rule
  B) policy makers decided that instability of the coefficients prevents the Taylor rule from having any role in policy decisions
  C) in the past, adherence to the Taylor rule led to policy mistakes
  D) all of the above
  E) none of the above

Question 2

Briefly explain the process of multiple deposit creation.
 
  What will be an ideal response?

[pangili4]

Answer to Question 1

E

Answer to Question 2

Part of the money supply process in which an increase in bank reserves results in rounds of bank loans and creation of checkable deposits and an increase in the money supply that is a multiple of the initial increase in reserves.