Homework Answers
47. We have
Target FFR = 0.02 + 0.02 + 0.5*0.03 + 0.5*(0.02 - 0.02)
= 0.055
= 5.5%
Select 5.5%
59. We use the quantity equation where Nominal GDP = velocity x money supply
Money supply = nominal GDP/velocity
= 12000/4
= $3000
Select $3000.
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Question 47 0.1 pts According to the Taylor Rule: if the inflation rate is 2% and...
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According to the Taylor Rule, if the inflation rate is 3 percent and the GDP gap is 2 percent, what does the federal funds rate target equal? Group of answer choices 8.5 percent 5.5 percent 3.5 percent 6.5 percent
6. The Taylor rule Aa Aa Economist John B. Taylor found empirically that the Federal Reserve (the...
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Use the Taylor rule to: Calculate the target for the federal funds rate for October 2012,...
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Use the following Taylor rule to calculate what would happen to the real interest rate if...
Use the following Taylor rule to calculate what would happen to
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points.
Target federal funds rate
= Natural rate of interest + Current inflation + 1/2(Inflation gap)
+ 1/2(Output gap)
Use the following Taylor rule to calculate what would happen to the real interest rate if inflation increased by 7 percentage points. Target federal funds rate = Natural rate of interest + Current inflation + 1/2(Inflation gap) + 1/2(Output gap)...
Use the following Taylor rule to calculate what would happen to the real interest rate if...
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6. The Taylor rule Aa Aa Economist John B. Taylor found empirically that the Federal Reserve (the Fed) tended to follow a general rule for federal funds rate targeting: Federal Funds Target Rate (FFTarget) = 296 + Inflation Rate + [0.5 x (Inflation Gap)] + [0.5 x (Output Gap) Use this relationship to fil in the following table with the target federal funds rate the Fed will set, given the inflation rate, target inflation rate, and output gap percentage. Target...
Use the following Taylor rule to calculate what would happen to
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points.
Target federal funds rate
= Natural rate of interest + Current inflation + 1/2(Inflation gap)
+ 1/2(Output gap)
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