Assume that targeted inflation is 1 percent. According to the Taylor rule, the federal funds rate is:
a. equal to 2 percent if inflation and output are at their target level.
b. equal to 6 percent if inflation is 3 percent, output is at its target level and the Fed's targeted federal funds rate is 2 percent.
c. equal to 4 percent if inflation is 2 percent , output is 2 percent above its target level and the Fed's targeted federal funds rate is 2 percent.
d. none of the above are correct.
B
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A photograph processing machine company requiring customers that buy a processing machine to purchase chemicals and photographic paper from them is an example of
A) bundling. B) a requirement tie-in sale. C) quantity discrimination. D) a two-part tariff.
An advantage of a functional division is that performance is
a. More easily measured b. More difficult to measure c. Not measured d. None of the above
From 2007 to 2008, the Federal Reserve System reduced interest rates, the price that borrowers pay. As a result, economists expected that the supply of money would
a. increase. b. decrease. c. not change. d. Uncertain-economic theory has no answer to this question.
If a competitive price-taker firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then
a. a one-unit increase in output will increase the firm's profit. b. a one-unit decrease in output will increase the firm's profit. c. total revenue exceeds total cost. d. total cost exceeds total revenue.