The Constant Term in the Taylor Rule Is Usually Equal

question 52

Multiple Choice

The constant term in the Taylor rule is usually equal to:

• A)The long-term risky real interest rate
• B)One percent point more than the long-term trend real growth rate of the economy
• C)The 30 day T-bill rate
• D)One percent point less than the long-term trend real growth rate of the economy

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Definitions:

Personal Liability

An individual's legal responsibility to satisfy a debt or legal obligation from personal assets.

Business Debts

Business debts are financial obligations that a business owes to creditors, which can arise from borrowing money, purchasing goods or services, or other business activities.

No Personal Liability

A legal principle or clause that protects an individual's personal assets from being used to satisfy business or contractual debts and liabilities.

Personal Liability

The legal responsibility of an individual to bear the burden of debt or obligation from his/her actions, separate from the liability of a business entity or corporation.