In the Taylor Rule, If the Output Coefficient ? Is

question 7

Multiple Choice

In the Taylor rule, if the output coefficient ? is set to zero, then the central bank

• A)is mostly concerned with maintaining a low inflation rate
• B)will lower interest rates whenever it goes above 2 percent
• C)will aggressively increase interest rates as soon as inflation rises
• D)engages in real GDP targeting
• E)none of the above

Apply economic principles to assess market outcomes in scenarios of changing supply, demand, and technological innovations.

Understand the short-run and long-run market equilibrium changes due to shifts in market demand and supply in competitive industries.

Identify the factors leading to entry and exit of firms in a competitive market.

Recognize the characteristics of a perfectly competitive market, including demand curve elasticity.