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

question 45

Multiple Choice

Using Taylor's rule,when the equilibrium real federal funds rate is 3 percent,the positive output gap is 2 percent,the target inflation rate is 1 percent,and the actual inflation rate is 2 percent,the nominal federal funds rate target should be

• A)5 percent.
• B)5.5 percent.
• C)6 percent.
• D)6.5 percent.

---

Definitions:

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on-demand or at a set time, with the payee’s name either mentioned or left blank.

Separate Agreement

An individual contract related to, but distinct from, another contract, often detailing specific aspects or obligations not covered in the primary agreement.

Incomplete Instrument

A legal document or financial instrument that is missing essential information or signatures.

Negotiable

A term referring to a document or instrument that is transferable from one person to another in a form that is legally effective for the transfer.