Author Question: We learn the following about a ski resort: ticket sales 100M, snow making expenses 70M, wages 20M, ... (Read 96 times)

frankwu · **on:** Jun 30, 2018

We learn the following about a ski resort: ticket sales 100M, snow making expenses 70M, wages 20M, interest on business loans 5M, and profits 5M. What is the contribution to GDP using the product approach?

A) 70M
B) 80M
C) 95M
D) 100M

Question 2

Is the Taylor rule compatible with a hierarchical mandate?

What will be an ideal response?

LP · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

A

Answer to Question 2

Yes. Because inflation is affected by output gaps, a central bank committed to inflation stability will not ignore output gaps but, rather, raise or lower its interest rate target, as indicated by the Taylor rule.