Given the following formula for the Taylor rule:Target federal funds rate = natural rate of interest + current inflation + 1/2(inflation gap) + 1/2(output gap)Every one percent increase in the rate of inflation will:
A. increase the real federal funds rate by 1.5%.
B. increase the real federal funds rate by 0.5%.
C. increase the target federal funds rate by 1.5%.
D. increase the target federal funds rate by 1.5% and increase the real federal funds rate by 0.5%.
Answer: D
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Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year. Larry's opportunity cost of attending Elite U is:
A. $20,000 B. $50,000 C. $70,000 D. $15,000
In the figure above, if income were distributed equally across all households, the poorest 10 percent of households would receive ________ of total income
A) 5 percent B) 10 percent C) 15 percent D) 20 percent
An increase in the price of product B resulted in an increase in the demand for product C. This indicates that products B and C are:
a. Normal goods b. Complementary goods c. Inferior goods d. Substitute goods
Why isn't the actual level of an index, for example the Dow Jones Industrial Average, very useful on its own?
What will be an ideal response?