The Taylor rule helps explain the relationship between the Fed's ________ and ________
A) money supply target; economic conditions
B) money supply target; the federal funds target
C) federal funds target; the monetary growth rule
D) federal funds target; economic conditions
Answer: D
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You have responsibility for economic policy in the country of Freedonia. Recently, the neighboring country of Sylvania has cut off all exports of oranges to Freedonia. George, who is one of your advisors, says that the best way to avoid a shortage of oranges is to take no action at all. Charles, another one of your advisors, argues that without a binding price floor, a shortage will certainly
develop. Otto, a third advisor, suggests that you should impose a binding price ceiling in order to avoid a shortage of oranges. Which of your three advisors is most likely to have studied economics? a. George b. Charles c. Otto d. Apparently, all three advisors have studied economics, but their views on positive economics are different.
Suppose that the market for labor is initially in equilibrium. An increase in the price of output will cause the equilibrium wage
a. and the equilibrium quantity of labor to rise. b. and the equilibrium quantity of labor to fall. c. to rise and the equilibrium quantity of labor to fall. d. to fall and the equilibrium quantity of labor to rise.
Which of the following is correct if there is a favorable supply shock?
a. the short-run aggregate supply curve and the short-run Phillips curve both shift right. b. the short-run aggregate supply curve and the short-run Phillips curve both shift left. c. the short-run aggregate supply curve shifts right and the short-run Phillips curve shifts left. d. the short-run aggregate supply curve shifts left and the short-run Phillips curve shifts right.
In order for product differentiation to take place
A. there must be physical differences among the products. B. there cannot physical differences among the products. C. there may or may not be physical differences among the products.