The Bank of Canada decreased the overnight interest rate in late 2007, even though inflation was increasing.

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“The Bank of Canada decreased the overnight interest rate in late 2007, even though inflation was increasing. This demonstrates a violation of the Taylor principle.” Is this statement true, false, or uncertain? Explain your answer.

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The Economics of Money Banking and Financial Markets

ISBN: 978-0321785701

5th Canadian edition

Authors: Frederic S. Mishkin, Apostolos Serletis

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