Business cycles into account when setting fedeal funds rate

Assignment Help Business Economics

Reference no: EM131112780

Suppose the Federal Reserve is following the Taylor rule, which takes both inflation and business cycles into account when setting the fedeal funds rate. Also suppose that the inflation rate in the economy is equal to 3 percent and the output gap is 5 percent.. Consider the information provided in the scenario: Taylor Rule: In this case the Federal Reserve will set the funds rate to be equal to: 16 percent, or 6.25 percent, or 5.75 percent, or 4.75 percent.

Reference no: EM131112780

Questions Cloud

Regarding lack of motivation in the workplace : Regarding lack of motivation in the workplace how does it happen? What are the consequences? And what are the benefits of motivating employees?

What is the biggest threat in the healthcare industry : Why did it take 9/11 for top law enforcement agencies of the United States to begin sharing information? How important is this sharing of information to fight against terror?

Find the equilibrium price and quantity : Suppose that demand changes to Qd =600 -2P. Find the equilibrium price and quantity, and show this on your graph.

Assignment on interpreting a platonic dialogue : This discussion assignment is designed to help you understand how to read and interpret a philosophical text. Read the assigned readings from the textbook and the online lectures on Socrates and Plato as background before completing the assignment..

Business cycles into account when setting fedeal funds rate : Suppose the Federal Reserve is following the Taylor rule, which takes both inflation and business cycles into account when setting the fedeal funds rate. Also suppose that the inflation rate in the economy is equal to 3 percent and the output gap is ..

Explore different styles of government and the impact : Answer the question below: To date, we have explored different styles of government and the impact that different systems have had on the development of their respective civilizations.

Exponential smoothing with smoothing constants : Based on MAD, which model is better, an exponential smoothing with smoothing constants of 0.7 or 0.8? Based on your selection, what is the forecast for month 25? Does a linear regression model is better than any of the previous (four) models? Expla..

What is the price of manufactures in terms of food : Country A has 30,000 units of labor and can produce 2 goods, manufactures and food. A’s producers take 3 units of labor to produce one unit of manufactures and 12 units to produce one unit of food. What is the price of manufactures in terms of food a..

How this could br true using aggregate demand : Explan how this could br true using aggregate demand and aggregate supply analysis.

User Account

All Pages