Using the Taylor Rule, If the Current Inflation Rate Equals

question 163

Multiple Choice

Using the Taylor rule, if the current inflation rate equals the target inflation rate and real GDP is greater than potential GDP, then the overnight lending target rate ________ the sum of the current inflation rate plus the real equilibrium overnight interest rate.

• A)will be greater than
• B)will be less than
• C)will be the same as
• D)may be greater than or less than

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Definitions:

Taxable Income

The amount of income used to determine how much tax an individual or a company owes to the government in a given tax year.

U.S. Tax Court

A federal court that provides taxpayers a venue to dispute tax assessments by the IRS without having to pay the disputed amount upfront.

U.S. Court of Appeals

A level of federal courts in the United States which review decisions of lower courts, typically called circuit courts.

U.S. Court of Federal Claims

A federal court that hears monetary claims against the U.S. government.