If the Fed's policy reaction function equals r = .02 + ?, where r is the real interest rate and ? is the inflation rate. When the inflation rate is zero, then the real interest rate will be:
A. set to equal 4 percent.
B. set to equal zero.
C. below the target value for the real interest rate.
D. set to equal 2 percent.
Answer: D
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What will be an ideal response?
Risk-averse individuals like good things more than they dislike comparable bad things
a. True b. False Indicate whether the statement is true or false
Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers it produces 90 units of output. Fixed cost of production are $6 and the variable cost per unit of labor is $10 . The marginal product of the seventh unit of labor is 4 . Given this information, what is the total cost of production when the firm hires 7 workers?
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An action that is the best choice under all conditions is known as a:
A. profit-maximizing strategy. B. dilemma. C. trigger strategy. D. dominant strategy.