According to the Taylor Rule,if Inflation in the Last Year

question 60

Multiple Choice

According to the Taylor rule,if inflation in the last year was 6% and output was 2% below its full-employment level,the nominal Fed funds rate should be

• A)3%.
• B)5%.
• C)7%.
• D)9%.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance based on the account type.

Service Revenue

Income earned by a company through the provision of services to customers, as opposed to selling goods.

Rent Expense

The cost incurred by a business or individual for leasing a property or space.

General Ledger

A comprehensive set of accounts that records all financial transactions of a business, showing assets, liabilities, equity, revenue, and expenses.