45. If actual inflation rises one percent above target and thecentral bank raises the actual funds rate by one percent then according to the Taylor rule, the central bank is being hawkish.
46. According to the Taylor rule, the Greenspan Fed was hawkish during the new economy years.
A) TrueB) False
47. According to the Taylor rule, the Greenspan Fed was hawkish during the job-less recovery as well as the job-loss recovery.
48. One way to explain the apparent tradeoff between inflation and unemployment during the 1960s, expectedinflation was consistently higher than the actual inflation implying that firms would be willing to hire more workers given this difference between expected and actual inflation. The result therefore would be higher inflation and lower unemployment, consistent with the facts during the 1960s.
49. We argued that the modified version of the Taylor rule during the jobless recovery following the 1990 - 1991 recession explained Greenspan and the Fed's behavior much better than the original Taylor Rule.
According to the Phillips curve analysis, if expected