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:

Journal Entry

A record in accounting that notes every financial transaction of a business in chronological order.

FOB Shipping Point

A shipping term indicating that the buyer assumes responsibility for the goods and the cost of transportation as soon as the goods leave the seller's premises.

Freight Costs

Expenses associated with transporting goods from one place to another, including the costs of shipping, handling, and insurance of goods during transit.

Perpetual Inventory System

A method of inventory management that records real-time transactions of goods, maintaining continuous inventory balance.