If Each of the Coefficients in Front of the Inflation

question 54

Multiple Choice

If each of the coefficients in front of the inflation gap and the output gap in the formula for the Taylor rule is 0.5, this implies:

• A)That the Fed assumes that inflation and output are right on target
• B)That inflation and output are one half a percent off of their targets
• C)The Fed is giving equal weight to objectives of inflation and output
• D)That the Fed will not accept higher inflation unless unemployment falls by twice the inflation rate

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Definitions:

Primary Appraisals

The initial evaluation process where an individual assesses the significance and potential impact of an event as stressful, positive, controllable, or irrelevant.

Secondary Appraisals

The evaluative process in which individuals assess their ability to cope with or manage the consequences of a potentially stressful or threatening event.

Lazarus

Usually refers to Richard Lazarus, a psychologist known for his research on stress and emotion, particularly regarding appraisal theory.

Biological Factors

Aspects relating to the biological systems of an individual that influence or determine behavioral tendencies, physical health, and mental well-being.