According to the Taylor Rule, If Real GDP Rises 1

question 60

Multiple Choice

According to the Taylor rule, if real GDP rises 1.0 % over potential GDP, the Fed should, _____.

• A)raise the federal funds rate by 5% relative to the inflation rate
• B)raise the federal funds rate by 1% relative to the inflation rate
• C)raise the federal funds rate by 2% relative to the inflation rate
• D)raise the federal funds rate by 0.5% relative to the inflation rate
• E)keep the federal funds rate at 4 percent

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Definitions:

Wernicke's Area

A region in the brain responsible for the comprehension of speech and language.

Dyslexia

A learning disorder characterized by difficulties reading due to problems identifying speech sounds and learning how they relate to letters and words.

Dyslexic Parent

An adult with dyslexia, a specific learning disorder characterized by difficulties with accurate and/or fluent word recognition, who may have children.

Genetic Component

The part of a trait, behavior, or disease that is influenced by genes inherited from one's parents.