taylors rule

Ya know, I looked at it and thought, I have a 50/50 chance at this. Muchhh better than these questions usually give me. So I mailed it in.

*Currently reading up on ethics just in case an “Adjustment” comes into play hahah

Just force yourself to remember it, you’ll be fine on the exam. Man, this makes me think of all the times people say “econ major is useless.” Now I really wish I was a econ major, and my financial economics class is next semester, one semester too late.

and at level 1 magician… are you forgetting your L1 curriculum? Just kidding of course #omnicient

I figured that nobody here wanted to be reminded of their agony-filled past. Thanks for dredging it up.

Onward and upward!

Ran into another taylor rule problem… redeemed myself this time:

Which statement is least likely correct:

A.) If the bank’s target inflation is higher than the current inflation rate, the policy rate will be increased

B.) If the current level of output is greater than the bank’s target output, the policy rate will be increased

C.) The real value of currency is negatively related to the risk premium demanded by the investors investing in that currency

Isn’t it B?

Taylor rule has taken a way bigger attention that it was supposed to

Incorrect.

It is A (The only Incorrect statement) the policy rate should decrease in this case

A

These are macro common sense to some extent. At least the way these choices were phrased. If you know Inflation, vs GDP ie output, monetary/fiscal responses to them going high or lower than projected by a central monetary authority, you will be in decent shape!

is out gap given by potential output- actual output or actual output-potential output. taylor’s rule seems to suggest the second one.

also are we suppised to take the logs of output or not?didnt see the practice q do that.

also are we suppised to take the logs of output or not?didnt see the practice q do that.

Late the party - answer should be A

Can someone give their best summary of the Taylor Rule?

also are we suppised to take the logs of output or not?didnt see the practice q do that- could someone please answer this

i think values will be given. all we need to take the right values and plug in the formula. We will take neither sinuses, cosinuses, exponentials, nor logs