According to the Taylor rule, the Federal Reserve sets interest rates in response to:
A. the inflation rate and the current output gap.
B. the inflation rate and the unemployment rate.
C. the current output gap and the target money supply growth.
D. the S&P 500 index and the inflation rate.
Answer: A
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If the government spending multiplier is 7, the tax multiplier must be
A) -6. B) -3. C) 3. D) 7.
Graphically, producer surplus is the area below the price line and above the supply curve
a. True b. False Indicate whether the statement is true or false
Ron owns a mineral water plant that was set up with an initial investment of $4,000 . Each bottle of mineral water produced costs Ron $0.80 . In the month of January, Ron's firm sold 3,000 bottles of water at $1.80 per bottle. The economic profit made by Ron in January was:
a. $3,000 b. $3,200 c. ?$1,200 d. ?$1,000
The advertisement approach that allows a consumer to follow up directly to an advertising message is known as
A. direct marketing. B. mass marketing. C. indirect marketing. D. interactive marketing.