According to the Taylor Rule, If the Output Gap Rises

question 59

Multiple Choice

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

• A) 2.0%.
• B) 2.5%.
• C) 3.0%.
• D) 3.5%.

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Definitions:

Congressional Republicans

Members of the United States Congress who are affiliated with the Republican Party, one of the two major political parties in the U.S.

Corporate Spokesman

An individual appointed by a company to communicate its views, policies, and news to the public and media.

Ronald Reagan

The 40th President of the United States (1981-1989), known for his conservative policies, economic reforms, and a strong stance against the Soviet Union during the Cold War.