According to the Taylor rule, if real GDP is 4 percent below potential GDP, the Fed should:
A. lower the federal funds rate by 2 percentage points.
B. lower the federal funds rate by 4 percentage points.
C. lower the federal funds rate by 8 percentage points.
D. do nothing, as the economy will correct itself.
A. lower the federal funds rate by 2 percentage points.
Economics
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At lower interest rates the
A) money supply is lower. B) quantity of money demanded is higher. C) money supply is indeterminate. D) quantity of money demanded is lower.
Economics
Explain why the timing of fiscal policy may be more difficult than the timing of monetary policy
What will be an ideal response?
Economics