Suppose the inflation rate target is "0" and the long run federal funds target is also "0." If the federal funds rate set using the Taylor rule is 1.5% and inflation rate is 3%, the output gap is ________
A) 1.5% B) 6% C) -6% D) 4.5%
C
You might also like to view...
An "unemployment spell" is a period during which:
A. an unemployed individual leaves the labor force and then returns. B. an individual is continuously unemployed. C. the unemployment rate exceeds 15 percent. D. the unemployment rate is less than 10 percent.
The total of individual payoffs in the grand coalition must be less than the value the coalition earns
Indicate whether the statement is true or false
What is NOT used in the calculation of GDP (expenditure model)?
a. the value of factories built during the year b. US citizen purchases automobiles made in Germany c. the value of US corporate stocks purchased by US investors d. the value of the decline in US business inventories
How does innovation differ from invention and diffusion? How does innovation affect competition among firms?
What will be an ideal response?