Using Taylor's rule, when the equilibrium real federal funds rate is 2 percent, there is no output gap, the actual inflation rate is zero, and the target inflation rate is 2 percent, the nominal federal funds rate should be
A) 0 percent.
B) 1 percent.
C) 2 percent.
D) 3 percent.
B
Economics
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When will a decrease in aggregate demand not result in a lower inflation rate in the short run?
What will be an ideal response?
Economics
Along the short-run supply curve (SRAS), a decrease in the aggregate demand curve will decrease: a. both the price level and real GDP
b. real GDP without raising the price level. c. the price level without affecting real GDP. d. the price level but reduce real GDP.
Economics