Is the Taylor rule compatible with a hierarchical mandate?
What will be an ideal response?
Yes. Because inflation is affected by output gaps, a central bank committed to inflation stability will not ignore output gaps but, rather, raise or lower its interest rate target, as indicated by the Taylor rule.
You might also like to view...
The price of peanut butter falls and as a result the demand for jelly increases. We can conclude that: a. peanut butter and jelly are substitutes
b. peanut butter and jelly are complements. c. peanut butter and jelly are inferior goods. d. the marginal value of jelly is greater than the marginal value of peanut butter.
Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. What happens to the equilibrium wage and quantity of life guards?
a. Both the equilibrium wage and quantity increase. b. Both the equilibrium wage and quantity decrease. c. The equilibrium wage increases, and the equilibrium quantity decreases. d. The equilibrium wage decreases, and the equilibrium quantity increases.
If there is an excess supply of sport utility vehicles, then:
A. demand is greater than supply. B. quantity supplied is greater than quantity demanded. C. quantity demanded is greater than quantity supplied. D. supply is greater than demand.
A cartel is a group of firms that ________ to make price and output decisions.
A. explicitly colludes B. implicitly colludes C. act independently D. are unable