According to the Taylor rule, the Fed should:
a. lower the fed funds rate by 2.0% if inflation rises 1.0% above its target of 1.0%.
b. raise the fed funds rate by 2.0% if inflation rises 1.0% above its target of 1.0%.
c. lower the fed funds rate by 0.5% if inflation rises 1.0% above its target of 2.0%.
d. raise the fed funds rate by 0.5% if inflation rises 1.0% above its target of 2.0%.
d
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The decision by the federal government to prohibit cigarette companies from advertising on television actually caused the companies' profits to increase, an outcome that is consistent with the prediction of the prisoner's dilemma game
Indicate whether the statement is true or false
If the economy were left on its own without the interference of government or the Fed, it would move toward an equilibrium rate of growth that would produce, with only minor interruptions, full employment without inflation. What school supports this view?
a. classical b. Keynesian c. monetarism d. supply-side e. neo-Keynesian
The value of the accumulated assets of an individual is called
a. the Lorenz coefficient b. the Gini coefficient c. income d. wealth e. quintiles
A price floor policy establishes a minimum price for a market. Which of the following results from a binding price floor?
A. Shortage B. Excess demand C. Excess supply D. Equilibrium