Using the Taylor rule, if the current inflation rate equals the target inflation rate and real GDP is less than 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 less than B) will be greater than
C) will be the same as D) may be greater than or less than
A
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If a used-car dealer enjoys economic profits, then
A) as a group, its customers necessarily suffered a like amount in economic losses. B) as a group, its customers were necessarily made worse off. C) as a group, its competitors necessarily suffered economic losses. D) all of the above are true. E) none of the above is true.
In a study published in 1963, Milton Friedman and Anna Schwartz found that in every business cycle they studied over nearly a hundred-year period, the growth rate of the ________ decreased before ________ decreased
A) money supply; interest rates B) money supply; output C) budget deficit; interest rates D) budget deficit; output
If the functional form of the conditional variance function is incorrect, then
A) the standard errors computed by WLS regression routines are invalid B) the OLS estimator is biased C) instrumental variable techniques have to be used D) the regression R2 can no longer be computed
The discount rate is the interest rate
a. commercial banks charge their low-risk customers for a loan. b. savings and loan associations pay for using savings deposit funds. c. the U.S. Treasury pays individuals who buy Treasury bonds in denominations of $10,000 or more. d. the Federal Reserve charges banking institutions for borrowing its funds.