According to the Taylor Rule,the Fed Should Raise the Federal

question 69

Multiple Choice

According to the Taylor rule,the Fed should raise the federal funds interest rate when inflation ________ the Fed's inflation target or when real GDP ________ the Fed's output target.

• A)rises above;drops below
• B)drops below;drops below
• C)rises above;rises above
• D)drops below;rises above

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Definitions:

Collateral Agreements

Legal contracts where a borrower pledges an asset as security for a loan, which the lender can claim if the loan is not repaid.