Suppose Government Deficits Increase Such That Real Interest Rates Rise

question 14

Multiple Choice

Suppose government deficits increase such that real interest rates rise by 1.5 percentage points. According to the Taylor rule, if inflation targets remain unchanged, then nominal interest rates should rise by

• A) less than 1 percent.
• B) between 1 and 1.5 percent.
• C) exactly 1.5 percent.
• D) between 1.5 and 2 percent.
• E) more than 2 percent.

---

Definitions:

Glass Ceiling

An invisible barrier that prevents minorities and women from rising to the upper rungs of the corporate ladder, regardless of their qualifications or achievements.

Junior Manager

A junior manager is an entry-level management position responsible for overseeing projects, teams, or certain aspects of an organization's operations, usually under the guidance of more senior management.

Deborah Tannen

A prominent American academic and professor of linguistics known for her research on the influence of language in human relationships and communication.

Camouflages Accomplishments

Deliberately downplaying or hiding one's achievements or successes.