The Taylor rule (where a and b are positive parameters) is represented by

A) i = i + a(π – π) – b(un – u).
B) i = i + a(π – π ) + b(u – un).
C) i = i + a(π – π) – b(u – un).
D) none of the above

ANSWER:

C) i = i + a(π – π) – b(u – un).