Suppose the Inflation Rate Target Is Zero and the Long-Run

question 47

Multiple Choice

Suppose the inflation rate target is zero and the long-run federal funds target is also zero.If the inflation rate is 4 percent and the output gap is ‒2 percent,the federal funds rate set by the Taylor rule is ________.

• A) 5 percent
• B) 6 percent
• C) 2 percent
• D) 8 percent

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Definitions:

Reinforcers

Stimuli that increase the likelihood of a repeated behavior by providing a consequence that is desirable or by removing an undesirable one.

Indiscriminate Attachment

A phase in early child development where infants show no preference toward any specific caregivers and are equally comfortable with familiar and unfamiliar people.

Attachment Bonds

Emotional connections formed between individuals, crucial for child development.

Preference

The act of favoring or choosing something over another based on subjective criteria.