If the inflation rate target is 2%, the current inflation rate is 1%, and the output gap is minus 2%, then according to the Taylor rule, the nominal federal funds rate should be ________ percent

The German government carries out an official foreign exchange intervention in which it uses dollars held in an American bank to buy French currency from its citizens. How is this accounted for in the balance of payments?

A) current account, French good export B) current account, German good import C) financial account, French asset export D) financial account, German asset export E) financial account, German asset import

Other things equal, the demand for a good tends to be more inelastic when

a. there are fewer available substitutes. b. a longer time period is considered. c. the good is considered a luxury good. d. the market for the good is more narrowly defined.