QUESTION 7 Consider the following Taylor rule i=0.02+0.5y +0.5(x-2% ) where y is the percentage difference between the actual output and its full-employment level, while z is inflation over the last 12 months. The evolution of the economy is described by the following data: Full-emp't output Actual output 100.00 Price level January, 2050 February, 2050 March, 2050 April, 2050 May, 2050 June, 2050 July, 2050 August, 2050 September, 2050 100.00 100.00 100.00 101.41 99.52 100.00 102.31 104.71 100.00 101.31 102.58 100.00 100.10 99.64 100.00 101.89 100.07 100.00 100.55 100.71 100.00 100.83 99.20 100.00 99.75 98.40 October, 2050 100.00 99.95 101.82 November, 2050 100.00 98.54 98.83 December, 2050 100.00 97.52 98.68 January, 2051 100.00 97.43 98.10 According to the Taylor rune, in January 2051 the central bank must have set the interest rate at Note: Type in your answer rounded to two decimal places, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard may automatically delete it and you should not do anything about it. In case of percentages, do not type in the percentage symbol "%". If your answer is a negative number, type a dash in front of your answer, i.e, "-999.99". percent.
QUESTION 7 Consider the following Taylor rule i=0.02+0.5y +0.5(x-2% ) where y is the percentage difference between the actual output and its full-employment level, while z is inflation over the last 12 months. The evolution of the economy is described by the following data: Full-emp't output Actual output 100.00 Price level January, 2050 February, 2050 March, 2050 April, 2050 May, 2050 June, 2050 July, 2050 August, 2050 September, 2050 100.00 100.00 100.00 101.41 99.52 100.00 102.31 104.71 100.00 101.31 102.58 100.00 100.10 99.64 100.00 101.89 100.07 100.00 100.55 100.71 100.00 100.83 99.20 100.00 99.75 98.40 October, 2050 100.00 99.95 101.82 November, 2050 100.00 98.54 98.83 December, 2050 100.00 97.52 98.68 January, 2051 100.00 97.43 98.10 According to the Taylor rune, in January 2051 the central bank must have set the interest rate at Note: Type in your answer rounded to two decimal places, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard may automatically delete it and you should not do anything about it. In case of percentages, do not type in the percentage symbol "%". If your answer is a negative number, type a dash in front of your answer, i.e, "-999.99". percent.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter24: The Aggregate Demand/aggregate Supply Model
Section: Chapter Questions
Problem 43CTQ: Economists expect that as the labor market continues to tighten going into the latter part of 2015...
Related questions
Question
Transcribed Image Text:QUESTION 7
Consider the following Taylor rule
i=0.02+0.5y+0.5(n-2% )
where y
is the percentage difference between the actual output and its full-employment level, while T is inflation over the last 12 months. The evolution of the economy is described by the following data:
Full-emp't output Actual output
Price level
January, 2050
February, 2050
March, 2050
100.00
100.00
100.00
100.00
101.41
99.52
100.00
102.31
104.71
April, 2050
Маy, 2050
June, 2050
100.00
101.31
102.58
100.00
100.10
99.64
100.00
101.89
100.07
July, 2050
August, 2050
September, 2050
October, 2050
100.00
100.55
100.71
100.00
100.83
99.20
100.00
99.75
98.40
100.00
99.95
101.82
November, 2050
100.00
98.54
98.83
December, 2050
100.00
97.52
98.68
January, 2051
100.00
97.43
98.10
According to the Taylor rune, in January 2051 the central bank must have set the interest rate at
Note: Type in your answer rounded to two decimal places, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit
in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard may automatically delete it and you should not do anything about it. In case of percentages, do not type in the percentage symbol "%". If your answer is a negative
number, type a dash in front of your answer, i.e, “-999.99".
percent.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Macroeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506756
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning