Multiple Choice
The next questions refer to the following.
Suppose the central bank follows the Taylor Rule
nominal interest rate = .03 + .5(output gap) + 1.5(inflation rate - .02) .
-The real interest rate will be approximately
A) -.01
B) .02
C) .025
D) .05
E) .07
Correct Answer:
Verified
Correct Answer:
Verified
Q2: Open market operations refer to<br>A) all economic
Q3: In practice,effective deflation<br>A) occurs when the inflation
Q4: Inflation targeting most commonly consists of<br>A) a
Q5: If a central bank targets the exchange
Q6: Central banks commonly aim to keep the
Q8: If the central bank targets the money
Q9: The credit channel refers to<br>A) changes in
Q10: According to the Quantity Theory of Money,if
Q11: The LM curve slopes upward because<br>A) as
Q12: If the nominal interest rate is currently