The components of the formula for the Taylor rule includes each of the following, except:
A. the current inflation rate.
B. the inflation gap.
C. the 30-year U.S. Treasury bond rate.
D. the target federal funds rate.
Answer: C
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An open market ________ by the Fed increases the money supply, which leads to ________ interest rates and increased GDP
A) sale; decreased B) purchase; decreased C) purchase; increased D) sale; increased
As a result of the 2008-2009 financial crisis and the decrease in GDP in many European economies, we would expect
A) an increase in the demand for U.S. exports and a leftward shift in the demand curve for dollars. B) a decrease in the demand for U.S. exports and a leftward shift in the demand curve for dollars. C) a decrease in the demand for U.S. exports and a rightward shift in the demand curve for dollars. D) a decrease in the demand for U.S. imports and a movement up along the demand curve for dollars.
Firms free ride on the research and development of other firms when they
A) buy a firm's newly developed product, and then give it away to consumers. B) choose a level of research and development that is inefficiently high. C) license a new technology from a firm that developed the new technology. D) use knowledge other firms have developed without paying for that knowledge.
A corporate bond sold in 2000 with a face value of $10,000 . a $100 coupon, and a maturity date in 2010
a. will pay the bondholder $100 a year every year from 2000 to 2010 and will also pay him $9,000 in 2010. b. will pay the bondholder $100 a year every year from 2000 to 2010 and will also pay him $10,000 in 2010. c. requires the bondholder to pay $100 a year every year from 2000 to 2010 and will pay him $10,000 in 2010. d. requires the bondholder to pay $100 in 2000 only and will pay him $10,000 in 2010.