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A university offers a walking escort service to increase security around campus. The system consists of specially trained uniformed professional security officers that accompany students from one campus location to another. The service is operated 24 hours a day, seven days a week. Students request a walking escort by phone. Requests for escorts are received, on average, every 5 minutes with a coefficient of variation of 1. After receiving a request, the dispatcher contacts an available escort (via a mobile phone), who immediately proceeds to pick up the student and walk her/him to her/his destination. If there are no escorts available (that is, they are all either walking a student to her/his destination or walking to pick up a student), the dispatcher puts the request in a queue until an escort becomes available. An escort takes, on average, 25 minutes for picking up a student and taking her/him to her/his desired location (the coefficient of variation of this time is also 1). Currently, the university has 8 security officers who work as walking escorts.How many security officers are, on average, available to satisfy a new request?How much time does it take-on average-from the moment a student calls for an escort to the moment the student arrives at her/his destination?
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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