According to the Taylor Rule, if current inflation is 2.5 percent, the target inflation rate is 2 percent, and output is 1 percent above potential, the Fed should target the federal funds rate at 5.25 percent.
Answer the following statement true (T) or false (F)
True
Target rate = 2 + 2.5 + (0.5)(2.5 ? 2) + 0.5 (1).
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Comparative advantage is defined as
A) producing all goods at lower opportunity costs than other countries can. B) producing more output of all goods than anyone else can. C) producing one good at a lower opportunity cost than another country can. D) the ability to produce more output from given inputs than anyone else can.
Which of the following is excluded in the current account?
A. goods exports B. goods imports C. capital inflow and outflow D. net unilateral transfers
Which of the following is a characteristic of economic rent?
A. It equals economic profit minus accounting profit. B. It can never be negative. C. It can be positive, zero, or negative. D. It is driven towards zero by free entry.
According to the 2009 hamburger standard, the country with the most overvalued currency relative to the United States dollar was
A. China. B. Norway. C. Australia. D. Japan.