Using Taylor's rule, when the equilibrium real federal funds rate is 3 percent, the positive output gap is 2 percent, the target inflation rate is 1 percent, and the actual inflation rate is 2 percent, the nominal federal funds rate target should be
A) 5 percent.
B) 5.5 percent.
C) 6 percent.
D) 6.5 percent.
D
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If the supply curve is perfectly inelastic and an excise tax is imposed
a. all of the tax is paid by buyers b. all of the tax is paid by sellers c. the market price will rise by the amount of the tax d. the market price will fall by the amount of the tax e. the tax is divided equally between buyers and sellers
A bank wants to get rid of excess reserves by making loans because
a. it will be penalized if it does not get rid of the reserves b. the reserves do not earn interest c. it is afraid it will lose the excess reserves d. firms will not borrow from a bank with excess reserves e. the bank has too many liabilities
Which of the following lends reserves to private banks?
A. The Legislative Branch of government B. Comptroller of the Currency C. State banking commissions D. The Federal Reserve System
We see a backward-bending labor supply curve whenever
A. the income effect dominates the substitution effect over some range of wage rates. B. the substitution effect dominates the income effect over some range of wage rates. C. minimum wages are set too low. D. minimum wages are set too high.