The Taylor rule implies that the Fed should set the federal funds ...

[sc00by25]

The Taylor rule implies that the Fed should set the federal funds target based on which of the following?
 
  A) the proportionate gap between actual real GDP and a measure of potential real GDP
  B) the current deviation of the actual inflation rate from the Fed's inflation objective
  C) an estimated long-run real interest rate
  D) all of the above

Question 2

________ emphasize(s) that changing expectations about the future is the main reason behind fluctuations in the economy.
 
  A) The real business cycle theory B) Keynesian theory
  C) Ricardian theory D) Monetary theories

[GCabra]

Answer to Question 1

D

Answer to Question 2

B

[sc00by25]

Thanks for the timely response, appreciate it

[tranoy]

Gracias!