Suppose the equilibrium real federal funds rate is 5 percent, the target rate of inflation is 3 percent, the current inflation rate is 5 percent, and real GDP is 4 percent above potential real GDP
If the weights for the inflation gap and the output gap are both 1/2, then according to the Taylor rule the federal funds target rate equals
A) 1 percent. B) 9 percent. C) 13 percent. D) 17 percent.
C
You might also like to view...
A corporation's management
A) owns the corporation. B) hires the board of directors. C) is liable for the corporation's debts. D) operates and controls a corporation in its day-to-day activities.
The table below shows the number of labor hours required to produce one gallon of wine and one pound of cheese in the United States and France. If the United States and France engage in free trade with each other, the international price of cheese will lie between ________ and Labor hours to make:In the United StatesIn France1 gallon of wine4.001.001 pound of cheese1.002.00
A. two gallons of wine per pound; four gallons of wine per pound. B. 0.5 gallon of wine per pound; one gallon of wine per pound. C. 0.25 gallon of wine per pound; two gallons of wine per pound. D. one gallon of wine per pound; four gallons of wine per pound.