If the actual federal funds rate is higher than the

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Macroeconomics: Principles & Policy
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Chapter 9 / Exercise 2
Macroeconomics: Principles & Policy
Baumol/Blinder
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44. If the actual federal funds rate is higher than the funds rates implied by the Taylor rule, then we say that the central bank is hawkish.A) TrueB) FalseCorrect Answer(s):True
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Macroeconomics: Principles & Policy
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Chapter 9 / Exercise 2
Macroeconomics: Principles & Policy
Baumol/Blinder
Expert Verified
45. If actual inflation rises one percent above target and the central bank raises the actual funds rate by one percent then according to the Taylor rule, the central bank is being hawkish.
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46. According to the Taylor rule, the Greenspan Fed was hawkish during the new economy years.
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47. According to the Taylor rule, the Greenspan Fed was hawkish during the job-less recovery as well as the job-loss recovery.
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48. One way to explain the apparent tradeoff between inflation and unemployment during the 1960s, expected inflation 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 withthe facts during the 1960s.A) TrueB) FalseCorrect Answer(s):False
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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.
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50. According to the Phillips curve analysis, if expected inflation is equal to actual inflation then we are at NAIRU. However, if actual inflation is higher than expected, then the actual unemployment rate will be higher than that associated with NAIRU.
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51. If firms and workers had perfect foresight as to inflation so that actual = expected inflation at all times, then the Phillips curve would be vertical and thus, there would be no trade between unemployment and inflation, even in the short run.
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52. We argued that a federal funds rate target of 4% is consistent with the stance of monetary policybeing neutral as in neither tight nor loose.A) TrueB) False
Table for Individual Question FeedbackPoints Earned: 1.5/1.5 Correct Answer(s):TrueTime expired Your time has expired. The assessment has been automatically submitted. ContinueOK

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