According to the Taylor Rule,if Output Is Above Its Full-Employment

question 87

Multiple Choice

According to the Taylor rule,if output is above its full-employment level and inflation is less than 2%

• A)the Fed should raise the Fed funds rate above 4%.
• B)the Fed should reduce the Fed funds rate below 4%.
• C)the Fed should make the Fed funds rate exactly 4%.
• D)what the Fed should do is ambiguous.

---

Definitions:

Economic Resources

Assets or inputs utilized in the production of goods and services, such as labor, land, and capital.

Shareholders' Equity

Shareholders' equity is the residual interest in the assets of a corporation that remains after deducting its liabilities, often referred to as stockholders' equity.

Private Company

A business entity owned by private individuals or entities and not publicly traded on a stock exchange.

Public Company

A company whose shares are traded freely on a stock exchange, making its financial records and activity reports publicly available.