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We are using data from 1975-07-01 to answer this question.
a) Using the original Taylor Rule where the equilibrium real rate of interest is estimated to be 2% and the target inflation rate is 2%, what is the federal funds rate implied by the Taylor Rule?
b) Using the Mankiw Rule, what is the federal funds rate implied by the Mankiw Rule?
c) According to the Taylor Rule, was the Fed being hawkish or dovish during this period? Explain and be speci?c with numbers.
d) Relate your answer in part o) to the work done by Kydland and Presoott.
e) Draw a reserve market diagram (reserve supply and reserve demand) locating the point associated with the actual federal funds rate on 197'6-07-01 as point A. We don't know what value reserve supply is so just label as RS. Now assuming a stable reserve demand ourve, explain and show what the Fed would have had to do to obtain the federal funds rate implied by the Taylor rule. Label this point as point B.
A stamping machine is classified as seven-year MACRS property. The cost basis for the machine is $120,000, and the expected salvage value is $10,000 at the end of 12 years. Compute the book value at the end of three years for tax purposes.
- To build upon our discussion of organizational objectives, I am asking you to explore the motivations of that organization.
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q1. illustrate what are the effects on the price level p also the nominal interest rate i whenever a credible
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