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liberstina [14]
3 years ago
5

Suppose the initial inflation rate and inflation target are both 2%, that the real federal funds rate is 2%, and that the econom

y is at the full employment level of output. According the Taylor Rule, the federal funds target should be . Suppose now that the inflation rate changes to 6%. The Taylor Rule now prescribes that the federal funds target should be
Business
1 answer:
Nuetrik [128]3 years ago
7 0

Answer:

a. 4%

b. 10%

Explanation:

1. Federal funds target = Real Federal funds rate + Inflation rate + 1/2( inflation gap) + 1/2(output gap)

Inflation gap = Current inflation - inflation target = 2% - 2% = 0

Economy is at full employment so output gap is 0.

= 2% + 2% + 1/2(0) + 1/2 (0)

= 4%

2. Federal funds target = Real Federal funds rate + Inflation rate + 1/2( inflation gap) + 1/2(output gap)

= 2% + 6% + 1/2(6% - 2%) + 1/2(0)

= 10%

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A company approves a large capital investment and implements a global computer system​ (for example, an Enterprise Resource Plan
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Structural

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2 years ago
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Answer:

$65.37

Explanation:

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Using this formula

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Let plug in the formula

P/0 = $2.60 (1 + .056) / .098 - .056

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6 0
3 years ago
investment is made at r percent compounded annually, at the end of n years it will have grown to A = P(1 + r)n . An investment m
bixtya [17]

Answer:

$1,500

Explanation:

Given the compounding formula A = P(1+r)^{n}

And given an investment (P), made at 16% compounded annually (r), and an ending amount of $1,740 (A) at the end of the year (n = 1 year), the original amount invested (P) can be computed as follows.

1,740 = P(1+0.16)^{1}

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Therefore, the original investment was $1,500.

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Do you agree that employers should be required by law to provide workers compensation insurance? Why or why not?
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