According to the Taylor rule, the Fed should raise the federal funds interest rate when inflation ________ the Fed's inflation target or when real GDP ________ the Fed's output target
A) rises above; drops below
B) drops below; drops below
C) rises above; rises above
D) drops below; rises above
C
You might also like to view...
Say's law argues that
I. overproduction is typical in a market economy. II. supply creates its own demand. A) I only B) II only C) Both I and II D) Neither I nor II
Suppose the price of good x in country A is lower than the price of good x in country B when no trade is permitted. In the absence of transportation costs, if the supply curve for good x in the two countries is sufficiently elastic, free trade in good x implies that country B will stop producing x.
Answer the following statement true (T) or false (F)
At a price of $400, consumers demand 1,500 units of a computer. When the price of the computer increases to $440, quantity demanded drops to 1,200 units. The price elasticity of demand for the computer is:
a. 2.6. b. 2.2. c. 2.1. d. 2.3.
If there are no interventions by finance ministers or control banks in the international market, then
A. the current account will be greater than the financial market. B. the capital market will equal the current account. C. the capital market will be greater than the current account. D. the current account and the capital account must sum to zero.