The Taylor rule relates a. inflation rates to unemployment ...

[jwb375]

The Taylor rule relates
 
  a. inflation rates to unemployment rates.
  b. the federal funds rate to inflation and output rates.
  c. differences in the federal funds rate from its target to differences in inflation and unemployment from its target.
  d. differences in the federal funds rate from its target to differences in inflation and unemployment from its target.
  e. All of the above

Question 2

In the case where money demand is completely interest insensitive (interest elasticity equals zero), an increase in the quantity of money will
 
  a. increase income but leave the interest rate unchanged.
  b. increase income and lower the interest rate.
  c. lower the interest rate but leave income unchanged.
  d. leave both income and the interest rate unchanged.

[shailee]

Answer to Question 1

D

Answer to Question 2

B

[jwb375]

Excellent

[flexer1n1]

TYSM