According to the Taylor Rule, If the Output Gap Falls

question 28

Multiple Choice

According to the Taylor Rule, if the output gap falls by 2% and the inflation gap rises by 1%, then the real federal funds rate should be

• A) lowered by 1.0%.
• B) lowered by 0.5%.
• C) left unchanged.
• D) raised by 1.0%.

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Definitions:

Detect Deception

The ability or methods used to identify instances of deceit or falsehoods in communication or behavior.

Indication

A sign or piece of information that suggests something may be true or is likely to happen, often used in decision-making to guide choices or anticipate outcomes.

Machiavellianism

A personality trait characterized by a manipulative approach, lack of morality, and a focus on self-interest and deception.

Predisposition

An inclination or tendency to think, feel, or act in a particular way.