Using the Taylor rule, if the current inflation rate exceeds the target inflation rate and real GDP exceeds potential GDP, then the federal funds target rate ________ the sum of the current inflation rate plus the real equilibrium federal funds rate
A) will be greater than
B) will be less than
C) will be the same as
D) may be greater than or less than
Answer: A
You might also like to view...
Which of the following explains the slower economic growth in the South compared to other regions of the country?
A. Much of the South's capital, public and private, was destroyed in the Civil War. B. The transcontinental railroads that were completed in the 1860s, 1870s, and 1880s all bypassed the South. C. The South remained an agricultural region after the Civil War instead of immediately becoming a higher productivity manufacturing region. D. All of the choices are true.
An increase in human capital
a. is of secondary importance to economic growth compared to physical capital. b. causes the production function to shift downward and become flatter. c. causes the production function to shift upward. d. causes the production function to shift downward. e. can be separated from labor.
Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses. Both hypotheses
a. suggest that, over time, the demand for unskilled labor has risen relative to the demand for skilled labor. b. suggest that, over time, the demand for skilled labor has risen relative to the demand for unskilled labor. c. emphasize the shrinking importance of international trade in recent years. d. emphasize the growing importance of women and teenagers in the workforce in recent years.
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential