According to the Taylor Rule,the Fed Should Set the Target

question 151

Multiple Choice

According to the Taylor rule,the Fed should set the target for the federal funds rate equal to the sum of the equilibrium real federal funds rate,the current inflation rate,one-half times the ________,and one-half times the ________.

• A)interest rate gap; inflation gap
• B)interest rate gap; output gap
• C)inflation gap; output gap
• D)unemployment gap; government-spending gap

---

Definitions:

Condition Subsequent

A condition in a contract that, upon occurrence, terminates the contract or an obligation within the contract.

Real Estate Contracts

Legally binding agreements related to the purchase, sale, lease, or exchange of real property.

Substantial Performance

A legal concept that occurs when a party has completed the major obligations of a contract, entitling them to payment.

Willful Departure

An intentional decision by an employee to leave their job or position without a legitimate reason or notification to the employer.