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Amiraneli [1.4K]
2 years ago
15

Suppose that actual inflation is 3 percent, the Fed's inflation target is 2 percentage points, and unemployment rate is 3 percen

t (which is 1 percent below the Fed's full-employment target of 4 percent). According to the Taylor Rule, what value will the Fed want to set for its targeted interest rate
Business
1 answer:
Dahasolnce [82]2 years ago
5 0

The government would set its targeted interest at 6.5%

Based on the Taylor's rule

R = π + A + 0.5(A-A*) + 0.5

This is the formula that helps to get the output gap

<u>Definition of terms</u>

R is the nominal federal funds rate

π is the real rate of federal funds = 2%

A is the rate of inflation

A* is the target of of inflation = 2%

Rate of unemployment = 3%

The government has a target of full employment that is at 4 percent.

When we enter the values into the formula

R = 2% + 3% + 0.5(3%-2%) + 0.5%(2%)

= 5% + 0.5% + 1%

= 6.5%

Therefore the government would set its targeted interest at 6.5%

Read more on brainly.com/question/14466278?referrer=searchResults

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5 0
3 years ago
A customer has requested that Byrd Corporation fill a special order for 9,000 units of product S51 for $20.50 a unit. Product S5
e-lub [12.9K]

Answer:

Effect on income= $4,500 increase

Explanation:

Giving the following information:

Special offer: 9,000 units of product S51 for $20.50 a unit.

Direct materials $ 3.10

Direct labor 1.50

Variable overhead 6.40

The customer would like modifications made to product S51 that would increase the variable costs by $5.00 per unit and that would require an investment of $36,000 in special molds that would have no salvage value.

<u>Because it is a special offer, we will not have into account the fixed costs.</u>

Unitary variable cost= 3.1 + 1.5 + 6.4 + 5= $16

Investment= 36,000

Effect on income= 9,000* (20.5 - 16) - 36,000

Effect on income= 40,500 - 36,000

Effect on income= $4,500 increase

8 0
3 years ago
Georgie is taking a chemistry class, where different liquids must be combined in specific amounts in order to produce an end pro
deff fn [24]

Answer:  d.       formal operational

Choices given in the question are:

a.      Latency

b.       trust vs. mistrust

c.        concrete operational

d.       formal operational

Georgie exhibits the major characteristics of a formal operational stage of cognitive development as per Piaget. This stage is characterized by the individual able to think abstractly and understand the form or structures of a problem. Georgie understands that in the experiment,  he must combine specific amounts of each ingredient and not just pour in them to create the right mixture

8 0
3 years ago
Juan purchased an insurance policy on his house that did not protect against vandalism or burglary. An arsonist burned down the
son4ous [18]

Answer:

Hi

The insurance company should not pay as it is explained that the insurance policy did not cover against vandalism or theft, and a fire is the product of an act of vandalism.

Explanation:

To avoid this type of problem, there are the multi-risk policies of the home, which offer coverage for damages due to vandalism, to cover the damages caused by malicious intent by third parties. This coverage usually includes damages caused by people other than the policyholder, their relatives, employees or people living in the insured home. Some insurers include damages caused by tumultuarial actions in activities of meetings or demonstrations, as well as the existence of legal strikes, unless the aforementioned actions had the character of a mutiny or popular uproar. But we must consider that not all vandalism situations are covered by insurance, and situations such as graffiti, inscriptions, graffiti drawings are usually not covered, but depend on each specific policy.

7 0
3 years ago
Interest rate​ (with changing​ years). Keiko is looking at the following investment choices and wants to know what annual rate o
olga2289 [7]

Answer:

7.38%

8.23%

7.01%

9.17%

Explanation:

Rate of return = (future value / amount invested)^(1/n) - 1

n = number of years

a. (788.17 / 360)^(1/11) - 1 = 7.38%

b. (11.499.87 / 3000) ^(1/17) - 1 = 8.23

c. (140,000 / 31,542.31)^(1/22) - 1 = 7.01

d. (1,100,000 / 32895.12)^(1/40) - 1 = 9.17

7 0
2 years ago
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