Using the Taylor Rule,if the Current Inflation Rate Equals the Target

question 15

Multiple Choice

Using the Taylor rule,if the current inflation rate equals the target inflation rate and real GDP equals potential GDP,then the federal funds target rate equals the

• A)current discount rate.
• B)current inflation rate.
• C)real equilibrium federal funds rate.
• D)current inflation rate plus the real equilibrium federal funds rate.

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Definitions:

Public Good

A product that is non-excludable and non-rivalrous in consumption, meaning it is available to all members of society without depletion.

Nonrival

Refers to a good where one person's use does not reduce the amount available for others.

Nonexcludable

A characteristic of goods where it is difficult or impossible to prevent people from using the good once it has been provided.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available to every individual without diminishing availability to others, such as national defense, public parks, and clean air.