According to the Taylor Rule, When the Economy Has a Zero-Unemployment

question 283

Multiple Choice

According to the Taylor rule, when the economy has a zero-unemployment gap and the inflation rate is equal to its target rate of 2 percent, the Fed's targeted interest rate should be

• A) 2 percent, and this implies a real interest rate of 0 percent.
• B) 2 percent, and this implies a real interest rate of 4 percent.
• C) 4 percent, and this implies a real interest rate of 2 percent.
• D) 4 percent, and this implies a real interest rate of 4 percent.

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Definitions:

Stage 4

In the context of sleep, this refers to the deepest stage of NREM (non-rapid eye movement) sleep, characterized by the presence of delta waves and considered crucial for restorative sleep.

REM

Rapid Eye Movement, a sleep phase characterized by fast and random movements of the eyes, associated with vivid dreaming and increased brain activity.

Alpha Waves

Brainwave patterns associated with relaxed wakefulness and meditation, typically in the frequency range of 8 to 12 Hz.

Meditating

The practice of focusing one's mind in silent reflection for the purpose of relaxing or spiritual growth.