The Taylor rule implies that the Fed should set the federal funds target based on which of the following?

A) the proportionate gap between actual real GDP and a measure of potential real GDP
B) the current deviation of the actual inflation rate from the Fed's inflation objective
C) an estimated long-run real interest rate
D) all of the above


D

Economics

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Asymmetric information before a transaction takes place generates the problem of

A) moral hazard. B) adverse selection. C) bank runs. D) irrational behavior.

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Games with a noncooperative equilibrium:

A. always result in a negative-negative outcome. B. always result in a positive-positive outcome. C. can result in either a positive-positive or negative-negative outcome. D. always result in a positive-negative outcome (zero-sum).

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In the Keynesian model, investment spending is an autonomous expenditure

a. True b. False Indicate whether the statement is true or false

Economics

Suppose the Bureau of Labor Statistics reports that the noninstitutional civilian population is 250 million. Of those, 150 million are employed and 5 million are unemployed. Of the 150 million employed, 5 million would like to be working twice as many hours and of the 250 million, 5 million have given up the search for work. The unemployment rate reported by the BLS would be __________, while if

the BLS counted the discouraged workers as unemployed the unemployment rate would be __________. a. 6.25%; 3.2% b. 2%; 6.25% c. 6.25%; 2% d. 3.2%; 6.25% e. 6%; 6.25%

Economics