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topjm [15]
3 years ago
6

If the Federal Reserve tries to target inflation near 2%, the inflation rate is 2.1%, and output is 4% below potential GDP, the

target federal funds rate according to the Taylor rule is
Business
1 answer:
bonufazy [111]3 years ago
5 0

Answer:

0.95%

Explanation:

Taylor's rule formula is as follow:

Target rate = Neutral rate + 0.5 x (Expected GDP growth rate - Long-term GDP growth rate) + 0.5 x (Expected Inflation rate - Target inflation rate)

The neutral rate is not given in the question. So let's assume that neutral rate is = 3%

--> Target rate = 3% + 0.5 x (-4%) + 0.5 x (2% - 2.1%)

--> Target rate = 1% - 0.05% =  0.95%

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Suppose Turing Inc. creates the first ever solar powered cell phone battery, absorbs ambient light and converts it into electric
horsena [70]

Answer:

This is an example of technology spillover and positive externalities.

Explanation:

Technology Spillover: The advantageous outcomes of new technological expertise on the productivity and creative capacity of other firms and nations are summoned as technology spillover.

Positive Externalities: When the consumption of goods and services leads to the benefits of other people, the term is known as positive externalities. If I become an educationist (assuming education as a good), it will help me to receive the private benefit. Besides the individual interest, I can help others to educate people.

Therefore, when Turning Inc. creates the first solar-powered cell phone battery, and it lasts up to 10 hours, it produces spillover technology.

When another company encourages to formulate technology with more lasting power, it creates a benefit for the other people as well as the technology spillover.

6 0
3 years ago
A realtor is trying to predict the value of a home. He has quantitative data available and has evidence that the home price has
nadya68 [22]

Answer:

a. linear regression.

Explanation:

Based on the information provided within the question it can be said that in this scenario the best choice would be a linear regression model. That is because this type of approach deals with seeing to what extent there exists a relationship between two variables. Which in this case would be the quantitative data/prices and the square footage of the home.

6 0
3 years ago
Majestic Homes' stock traditionally provides an 8% rate of return. The company just paid a $2 a year dividend which is expected
NemiM [27]

Answer:

The intrinsic value per year would be $52.5

Explanation:

We use the gordon model for stock valuation:

\frac{divends}{return-growth} = Intrinsic \: Value

current year dividends dividends x (1 + rgowth) = next year dividends

$2 * ( 1 + 0.05 ) = 2.10

then:

rate = 0.09

growth = 0.05

2.10/(0.09-0.05) = 52.5

3 0
4 years ago
Read 2 more answers
Because the fruit bowls were new to the market, dole's initial advertising objectives focused on ______ its audience about the p
Ronch [10]
Because the fruit bowls were new to the market, dole's initial advertising objectives focused on informing its audience about the product. When a new company or product launches, the goal is to get the consumer base aware that it exists. To bring awareness to the product, the advertising team has to inform the consumers what the product is and where they can find it. 
5 0
3 years ago
Firms earning zero economic profit are
worty [1.4K]

Answer:

The answer is letter A. Earning normal profits because their returns on investment are equal to the opportunity costs of the time invested.

Explanation:

Because all resources are being used efficiently and there is no need to use them elsewhere.

3 0
4 years ago
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