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According to the Taylor Rule, if the output gap rises by 1% and inflation rises by 2%, then the federal funds rate should rise by Select one:

According to the Taylor Rule, if the output gap rises by 1% and inflation rises by 2%, then the federal funds rate should rise by

Select one:

 A. 2.0%.

 B. 2.5%.

 C. 3.0%.

 D. 3.5%.


According to the Taylor Rule, if inflation rises by 2%, then the targeted interest rate should rise by more than 2%.

Select one:

 True

 False


According to the Taylor Rule, if the output gap rises by 2% and the inflation gap rises by 1%, then the real federal funds rate should rise by

Select one:

 A. 1.5%.

 B. 2.0%.

 C. 2.5%.

 D. 3.0%.


According to the Taylor Rule, if the output gap falls by 2% and the inflation gap rises by 1%, then the real federal funds rate should be

Select one:

 A. lowered by 1.0%.

 B. lowered by 0.5%.

 C. left unchanged.

 D. raised by 1.0%.


According to the Taylor Rule, if the output gap rises by 3% and inflation falls by 1%, then the federal funds rate should

Select one:

 A. fall by 2%.

 B. fall by 1%.

 C. remain unchanged.

 D. rise by 1%.

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