Suppose the actual equilibrium federal funds rate is above the rate implied by a particular inflation goal. In this situation, the Taylor rule implies that
A) monetary policy is contractionary. B) monetary policy is expansionary.
C) fiscal policy is expansionary. D) fiscal policy is contractionary.
Question 2
According to Okun's Law, ________ tends to decline when the growth rate of real GDP is ________.
A) inflation rate; low B) inflation rate; high
C) unemployment rate; high D) unemployment; low