Given a Monetary Policy Rule of the Form R =

question 21

Multiple Choice

Given a monetary policy rule of the form r = p + 0.5Y^{^} + 0.5p - p*) + 0.03 and assuming that the output gap equals zero, an unexpected price shock of

• A) raise nominal interest rates by 5 percent.
• B) raise the real interest rate target by 2.5 percent.
• C) raise nominal interest rates by 7.5 percent.
• D) raise the inflation target by 2.5 percent.
• E) wait and see if the shock turned out to be a permanent change.

---

Definitions:

Career Management

The process of planning and taking control of one’s career path, including goals setting, skill development, and seeking opportunities for growth.

Self-Assessments

The process through which individuals evaluate their own skills, attributes, and performance, often for personal or professional development purposes.

Action Plan

A detailed outline of steps and measures needed to achieve a specific goal or objective.

Self-Assessment

The practice of evaluating one's own strengths, weaknesses, and performance, often in a professional context.