Is the Taylor rule compatible with a hierarchical mandate?
What will be an ideal response?
Yes. Because inflation is affected by output gaps, a central bank committed to inflation stability will not ignore output gaps but, rather, raise or lower its interest rate target, as indicated by the Taylor rule.
Economics
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If the economy does not respond to the Fed's tools of policy, the Fed is very limited in what else it can do to correct economic imbalances
Indicate whether the statement is true or false
Economics
The measure of the price level of all goods and services produced in an economy is called _____
a. the GDP inflator b. the GDP deflator c. nominal GDP d. real GDP
Economics