According to the Taylor rule, which of the following will lead to the largest increase in the nominal federal funds rate?
A) a two percentage point increase in the target inflation rate
B) a one percentage point decrease in the target inflation rate
C) a one percentage point increase in output
D) a two percentage point decrease in output
E) a one percentage point increase in the inflation rate
Question 2
Among the countries that use the euro, the real exchange rate ________ and the nominal exchange rate ________.
A) is fixed; is fixed
B) is fixed; can change
C) can change; is fixed
D) can change; can change
The world has been horrified recently at a U.S. Congress so polarized and paralyzed that it cannot p
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