Given the Following Formula for the Taylor Rule: ?Target Federal

question 26

Multiple Choice

 Given the following formula for the Taylor rule: ?Target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) +½(output gap) ?Every one percent increase in the rate of inflation will: ?

• A) increase the real federal funds rate by 1.5%.?
• B) increase the target federal funds rate by 1.5%.?
• C) increase the real federal funds rate by 0.5%.?
• D) increase the target federal funds rate by 1.5% and increase the real federal funds rate by 0.5%.

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Definitions:

Nasopharynx

The upper part of the pharynx, connecting the nasal cavity above the soft palate.

Innate Immunity

Immune system response that is the same with each exposure to an antigen; there is no ability for the system to remember a previous exposure to the antigen.

Immune Response

The body's defense mechanism against foreign substances or pathogens through the activation of immune cells.

Thymus Gland

An organ located in the chest, which plays a vital role in the development and maturation of T-cells, essential for the immune response.