According to the Taylor Rule: if the inflation rate is 2% and the GDP gap is 3%, what does the federal funds rate target equal?
A) 9.5 percent
B) 7.5 percent
C) 5.5 percent
D) 8.5 percent
C
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Which of the following contributed to the rising mortgage default and foreclosure rates and the eventual economic crisis of 2008?
a. tightened mortgage lending standards and the reduction of loanable funds during 2001-2005 b. the increase in the greed of Wall Street bankers and other commercial lenders c. the substantial increase in sub-prime and adjustable rate mortgages as a share of the total during 2001-2006 d. the increase in the household savings rate during the two decades following 1985 e. the increase in fixed rate mortgages as a share of the total during the decade prior to the crisis
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.
Refer to the graph shown.
Assuming each carnival game costs $1 and each Ferris wheel ride costs $2, a consumer with $16 to spend will optimally choose to consume at point:
A. A. B. B. C. C. D. D.
Refer to the diagram. At output level Q total cost is:
A. 0BEQ.
B. BCDE.
A. 0BEQ.
B. BCDE.