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LOS h: Demonstrate the use of the Taylor rule to predict central bank behavior.
Q1. Calculate the short-term interest rate target given the following information.
|
Neutral rate |
4.00% |
|
Inflation target |
2.00% |
|
Expected Inflation |
5.00% |
|
GDP long-term trend |
3.00% |
|
Expected GDP |
1.00% |
A) 6.5%.
B) 4.5%.
C) 5.0%.
Q2. Calculate the short-term interest rate target given the following information.
|
Neutral rate |
4.00% |
|
Inflation target |
2.00% |
|
Expected Inflation |
4.00% |
|
GDP long-term trend |
3.00% |
|
Expected GDP |
5.00% |
A) 8%.
B) 5%.
C) 6%.
Q3. Which of the following is NOT an input to the Taylor rule?
A) The expected GDP.
B) The neutral rate.
C) The discount rate. | 
发表于 2009-3-5 13:05
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