A decrease in the real interest rate acts as ________ for lenders ...

[2125004343]

A decrease in the real interest rate acts as ________ for lenders and as ________ for borrowers.
 
  A) an increase in wealth; an increase in wealth
  B) an increase in wealth; a decrease in wealth
  C) a decrease in wealth; an increase in wealth
  D) a decrease in wealth; a decrease in wealth

Question 2

If the inflation rate target is 2, the current inflation rate is also 2, and the output gap is zero, then according to the Taylor rule, the nominal federal funds rate should be ________ percent.
 
  A) zero
  B) two
  C) four
  D) three
  E) none of the above

[SamMuagrove]

Answer to Question 1

C

Answer to Question 2

C

[2125004343]

Thanks for the timely response, appreciate it

[dantucker]

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