According to the Taylor Rule, If There Is No Unemployment

question 250

Multiple Choice

According to the Taylor rule, if there is no unemployment gap and

• A) if inflation rises to 4 percent, the Fed should raise its targeted interest rate to 7 percent.
• B) when real GDP is equal to potential GDP and inflation is equal to its target of 4 percent, the Fed's targeted interest rate should be kept at 2 percent.
• C) if inflation falls by 1 percentage point below its target of 2 percent, then the Fed should raise the real federal funds rate by one-half a percentage point.
• D) all of these are appropriate Fed actions.

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Definitions:

Conversion Disorder

A mental health condition where patients experience neurological symptoms, such as paralysis or blindness, without a discernible physical cause.

Reinforcement Approach

A concept in behavior psychology where the probability of a behavior is increased or decreased through positive or negative reinforcement.

Rewards

Benefits or incentives provided to motivate particular behaviors or outcomes, often used in contexts of learning, development, and organizational management.

Conversion Disorder Symptoms

Physical symptoms that affect voluntary motor or sensory functions, but with no apparent physical cause, often linked to psychological factors.