According to the Taylor rule, if there is a recessionary gap of 2 percent of potential output and inflation is 4 percent, what real interest rate will the Fed set?

The primary reason why the Fed cannot systematically surprise the public with its monetary policy is

A) the nonneutrality of money. B) the presence of productivity shocks that generate real business cycles independent of the monetary side of the economy. C) the presence of rational expectations among the public. D) the presence of propagation mechanisms within the economy.

Consumers do not prefer gifts-in-kind to cash gifts

What will be an ideal response?