This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: How might strict adherence to the Taylor rule discourage demand-pull inflation? How might ... (Read 65 times)

Deast7027

  • Hero Member
  • *****
  • Posts: 538
on: Jun 30, 2018
How might strict adherence to the Taylor rule discourage demand-pull inflation? How might demand-pull inflation occur, nonetheless?
 
  What will be an ideal response?

Question 2

To calculate value added, we need to subtract
 
  A) only the cost of domestically-produced intermediate inputs.
  B) only the cost of foreign-produced intermediate inputs.
  C) the cost of domestic- and foreign-produced intermediate inputs.
  D) total imports.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

nickk12214

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jun 30, 2018
Answer to Question 1

The Taylor rule requires monetary policy to respond to both inflation and output gaps. If an attempt to lower unemployment results in rising inflation, policy acquires an anti-inflationary bias. Though the Taylor rule can prevent the persistence of demand-pull inflation, it might make brief episodes of inflation more likely. If policy makers underestimate the natural rate of unemployment, adherence to the Taylor rule guarantees that inflation will rise.

Answer to Question 2

C


Deast7027

  • Member
  • Posts: 538
Reply 2 on: Jun 30, 2018
Excellent

gcook

  • Member
  • Posts: 343
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

Did you know?

It is believed that the Incas used anesthesia. Evidence supports the theory that shamans chewed cocoa leaves and drilled holes into the heads of patients (letting evil spirits escape), spitting into the wounds they made. The mixture of cocaine, saliva, and resin numbed the site enough to allow hours of drilling.

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

Did you know?

Children with strabismus (crossed eyes) can be treated. They are not able to outgrow this condition on their own, but with help, it can be more easily corrected at a younger age. It is important for infants to have eye examinations as early as possible in their development and then another at age 2 years.

Cause of Inflation Cause of Inflation
Right-hand Rule Right-hand Rule
The growth in demand for oil in China is driven by the growth in demand for personal transport The growth in demand for oil in China is driven by the growth in demand for personal transport
Economic recession in 2008 saw a small decrease in demand Economic recession in 2008 saw a small decrease in demand
To find derivative us the chain rule To find derivative us the chain rule
During a period of high power demand, the voltage output of the power company is reduced by ... During a period of high power demand, the voltage output of the power company is reduced by ...
Video: Polysaccharides

For a complete list of videos, visit our video library