The Taylor rule says that if inflation rises by 1 percent above its target of 2 percent, then the federal funds rate should be raised by ______ relative to the inflation rate.

a. 4%
b. 2%
c. 1%
d. 0.5%


d. 0.5%

Economics

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At a consumer optimum involving goods X and Y, the marginal utility of good X equals 5 utils. The price of good Y is three times the price of good X. What is the marginal utility of good Y?

A. 5. B. 3. C. 15. D. There is not enough information.

Economics

A credit card is

A) money. B) barter money. C) not money. D) fiat money. E) not money, but the card's credit line is money.

Economics

A game with a first-mover advantage is one in which:

A. the player who chooses first gets a higher payoff than those who follow. B. the player who chooses first gets to decide if a repeated game will start with cooperation from the beginning. C. the first player to move determines the payoffs for the rest of the game. D. None of these statements is true.

Economics

When the U.S. price level increases, we would expect a:

A. movement downward along the aggregate demand curve. B. movement up along the aggregate demand curve. C. shift to the right of the aggregate demand curve. D. shift to the left of the aggregate demand curve.

Economics