Suppose the Equilibrium Real Federal Funds Rate Is 5 Percent,the

question 86

Multiple Choice

Suppose the equilibrium real federal funds rate is 5 percent,the target rate of inflation is 3 percent,the current inflation rate is 5 percent,and real GDP is 4 percent above potential real GDP.If the weights for the inflation gap and the output gap are both 1/2,then according to the Taylor rule the federal funds target rate equals

• A)1 percent.
• B)9 percent.
• C)13 percent.
• D)17 percent.

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Definitions:

Neural Impulses

Electrical signals transmitted along neurons, facilitating communication between the brain and parts of the body.

Auditory Cortex

The region of the brain responsible for processing auditory information, including sounds and speech.

Vestibular Sacs

Components of the inner ear involved in the sense of balance, detecting changes in head position relative to gravity.

Tiny Hairlike Receptors

Microscopic structures often found on cells or in sensory systems that respond to physical stimuli, playing a key role in various sensory processes.