Multiple Choice
Suppose that the equilibrium real interest rate is 2 percent per year, inflation is 2.5 percent and the output gap is 1 percent. Using the Taylor rule, what is the federal funds rate?
A) 3 percent
B) 3.5 percent
C) 5.25 percent
D) 5.5 percent
Correct Answer:
Verified
Correct Answer:
Verified
Related Questions
Q77: In the market for bank reserves, if
Q78: When the Federal Reserve increases the Federal
Q79: The People's Bank of China announced that
Q80: If the interest rate on Treasury bills
Q81: The core inflation rate, measured by the
Q83: In March 2013 the Fed announced that
Q84: The monetary policy instrument the Federal Reserve
Q85: The Fed engages in open market operations
Q86: The key goal of monetary policy is
Q87: In the short run, the Fed's actions