According to the Taylor rule ________
A) expectations are formed in an adaptive fashion
B) the central bank should set its federal funds rate target by a formula that puts weight on both output and inflation gaps
C) a constant growth rate rule for money should be adopted
D) expectations should be formed consistent with the model of rational expectations
B
Economics
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In the above figure, flow B represents ________
A) household purchases of goods and services B) household borrowing C) household income D) firms' payments for labor services
Economics
The ________ curve is vertical
A) long-run aggregate demand B) short-run aggregate demand C) long-run aggregate supply D) short-run aggregate supply
Economics