If the Fed Were to Set Policy According to the Taylor

question 61

Multiple Choice

If the Fed were to set policy according to the Taylor rule, then if real GDP falls by 2 percent below potential GDP, the Fed should

• A)raise the real federal funds rate by 1 percentage point.
• B)reduce the real federal funds rate by 1 percentage point.
• C)raise the inflation rate by 1 percentage point.
• D)change the real federal funds rate until inflation hits the target rate of 4 percent.

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Definitions:

Neuromuscular Junction

The site where a motor neuron communicates with a skeletal muscle cell to induce muscle contraction.

Synaptic Cleft

The small gap between neurons at a synapse, across which neurotransmitters move to transmit electrical signals.

Sodium Channels

Protein channels located in cell membranes that allow the passage of sodium ions in and out of the cell, playing a crucial role in generating electrical signals in neurons and muscle cells.

Motor End Plate

A region of muscle fiber membrane that receives signals from nerves, triggering muscle contraction.