If the Fed Aims to Influence Economic Activity, Should It

question 168

Essay

If the Fed aims to influence economic activity, should it target the real interest rate or the nominal interest rate? If inflation changes by 2 percent, how large should the change in the nominal interest rate be?

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Definitions:

Timer Instructions

Commands in a programming language or control system for measuring time intervals or scheduling the execution of tasks.

On-Delay Nonretentive Timer

An electrical control function that delays the energizing of a circuit for a set period after a signal is received, but does not retain the timing interval in case of power loss.

Retentive Timers

Timers in a PLC that retain their value even after a loss of power or when the controlling signal is turned off.