Under rate of return regulation,

If the federal funds rate is set by the Taylor rule and the output gap increases by 5 percentage points, everything else remaining unchanged, the federal funds rate should ________

A) decrease by 2.5 percentage points B) decrease by 5 percentage points C) increase by 5 percentage point D) increase by 2.5 percentage points

In general, the costs tariffs and quotas impose on consumers are

A) large in total and large per person. B) small in total but relatively large per person. C) large in total but relatively small per person. D) small in total and small per person.