According to the Taylor rule, the Fed will set the federal funds rate target based on which of the following?
A) an estimated long-run real interest rate
B) the current deviation of the actual inflation rate from the Fed's inflation objective
C) the proportionate gap between actual real GDP and a measure of potential real GDP
D) all of the above
D
You might also like to view...
Goldsmiths who issued receipts for the customer deposits of gold or silver coins were probably the originators of
A) money. B) paper money. C) seignorage. D) Federal Reserve notes.
When Sidney's Sweaters, Inc makes exactly zero economic profit, Sidney, the owner
A) is taking a loss. B) will shut down in the short run. C) makes an income equal to his best alternative forgone income. D) will boost output.
Last year, Joan bought 50 pounds of hamburger when her household's income was $40,000 . This year, her household income was only $30,000 and Joan bought 60 pounds of hamburger. All else constant, Joan's income elasticity of demand for hamburger is
a. positive, so Joan considers hamburger to be an inferior good. b. positive, so Joan considers hamburger to be a normal good and a necessity. c. negative, so Joan considers hamburger to be an inferior good. d. negative, so Joan considers hamburger to be a normal good but not a necessity.
Suppose a large country experiences economic growth which results in an increased willingness to trade. The country's terms of trade will ________ because the increase in demand for imports will cause the price of its exports to ________ relative to the price it has to pay for its imports.
A. worsen; fall B. worsen; rise C. improve; rise D. improve; fall