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Explain the Taylor Rule,including the Formula for Setting the Federal

question 48

Essay

Explain the Taylor rule,including the formula for setting the federal funds rate target,and the components of the formula. If the Fed were to use this rule,how many goals would it use to set monetary policy?


Definitions:

Classical Conditioning

Type of learning whereby an unconditioned stimulus that elicits a specific response is paired with a neutral stimulus so that the response becomes conditioned.

Imprinting

Learning to make a particular response to only one type of animal or object.

Sexual Selection

Changes in males and females, often due to male competition and female selectivity, leading to increased fitness.

Natural Selection

Mechanism of evolutionary change caused by environmental selection of organisms most fit to reproduce; results in adaptation to the environment.

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