Suppose that the economy is thought to be 2 above potential, Ask an Expert

Management Studies

Suppose that the economy is thought to be 2% above potential ( that is, output gap is 2%) when potential output grows 4% per year. Suppose also that the Fed is following the Taylor rule, with an inflation rate of 2% over the past year. The federal funds rate is currently 3%. the equilibrium real federal funds rate is 3%, and the weights on the output gap and inflation gap are 0.5 each.

The inflation target is 1%.

A: Is the Federal funds rate currently too high or too low? by how much? and how did you come up wth this

View complete question

Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M9356616

Have any Question?Write your Review or question?

Related Questions in Operation Management

Social networking sites are fast becoming corporate

Social networking sites are fast becoming corporate resources. Consider how Facebook may be used by an organization. Can you think of different ways in which organizations such as Coca-Cola, KFC, or Bank of America can u ...

Assignmentplease explain why the company coca-cola is

Assignment Please explain why the company (coca-cola) is chosen and how your plans to analyze the company. COMPETITOR ANALYSIS : Identify the company's primary competitors and evaluate their strengths and weaknesses. (15 ...

A company would like to calculate a cost-to-cost trade-off

A company would like to calculate a cost-to-cost trade-off analysis for the following scenario: Cost to ship by rail =$0.088 per unit per kilometer shipped Cost to ship by truck =$0.122 per unit per kilometer shipped Num ...

1 use the internet to locate alternative suppliers for

1. Use the Internet to locate alternative suppliers for motorcycle fuel tanks. Identify 2 or 3 suppliers. Find out the amount of time and cost to ship a fuel tank (weighing about 5 pounds) via ground (surface delivery) f ...

It is important for organizational leaders to have a grasp

It is important for organizational leaders to have a grasp on the issues affecting employees in the contemporary workforce. The issues could include diversity, sensitivity, sexual harassment, discrimination, fairness and ...

1 discuss reasons why you think control is or is not an

1. Discuss reasons why you think control is or is not an important managerial activity. What methods have you witnessed managers or leaders use to exercise control? Was it effective? Explain. 2. Assembly of a Ford Fusion ...

Dean foods is one of the largest dairy food manufacturers

Dean Foods is one of the largest dairy food manufacturers in US. The main problem the company is facing is that due to competition from retailers, their milk supply has decreased in revenue by a huge percentage. List how ...

Read the case study case 7-weight watchers international

Read the case study: Case 7-Weight Watchers International Inc. Complete the following questions by Sunday midnight: 1. Who are Weight Watchers' core customers? Who are they seeking to expand to? 2. What is the biggest th ...

Assignmenta identify the role of asset management in the

Assignment a) Identify the role of asset management in the performance of an hospitality asset and the principles that underwrite its success b) Interpret the relationship between facilities management and the internal a ...

Written assignment cross-cultural communication -

Written Assignment: Cross-Cultural Communication - Individual Assignment: Write a 2,500-word paper addressing the following. What are the barriers to effective cross-cultural communication? How might these be surmounted? ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Operation Management Expert