A central bank that does NOT follow the Taylor principle will fail to raise nominal interest rates by more than the increase in expected inflation
Therefore, higher inflation will lead to a ________ in real interest rates, resulting in ________-sloping monetary policy curves. A) decline; downward
B) rise; downward
C) rise; upward
D) decline; upward
A
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Refer to Table 27-2. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if Congress and the president do not use fiscal policy
If Congress and the president want to keep real GDP at its potential level in 2017, they should A) decrease the discount rate. B) decrease government purchases. C) conduct expansionary fiscal policy. D) buy Treasury securities.
A payroll tax is also referred to as a social insurance tax
a. True b. False Indicate whether the statement is true or false