Using Taylor's Rule,when the Equilibrium Real Federal Funds Rate Is

question 12

Multiple Choice

Using Taylor's rule,when the equilibrium real federal funds rate is 2 percent,there is no output gap,the actual inflation rate is zero,and the target inflation rate is 2 percent,the nominal federal funds rate should be

• A)0 percent.
• B)1 percent.
• C)2 percent.
• D)3 percent.

---

Definitions:

Divides Labour

Separating a work process into distinct tasks that are performed by different workers or groups to enhance productivity and efficiency.

Mechanistic Organization

Describes a highly structured and hierarchical type of organization that operates under rigid procedures and clear chains of command.

Organic

Refers to processes, structures, or products developed naturally without artificial enhancements or chemicals.

Working to Rule

A form of industrial action where employees strictly follow the rules and guidelines to the letter as a means of protest, often reducing productivity.