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Math Help - GDP and Interest rates? Need help ASAP

  1. #1
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    GDP and Interest rates? Need help ASAP

    1. If potential real GDP is 8000, and actual real GDP is 8240, what is the percentage output gap? _________



    1. If potential real GDP is 9000, and actual real GDP is 8550, what is the percentage output gap? __________



    1. If the target real federal funds rate is 3% and inflation is 2.5%, what is the Fedís target nominal federal funds rate? __________



    1. If the target nominal federal funds rate is 5% and inflation is 3%, what is the target real federal funds rate? __________



    1. If the neutral real rate of interest is 2.5% and the inflation and output gaps are both zero, what is the Fedís target real federal funds rate? _________



    1. Assume the neutral real rate of interest is 2%, a target rate of inflation of 2% and ay and aπ are both 1. With an excess demand from a 3% output gap increasing inflation to 5%, what is the Taylor Rule target real federal funds rate? ________



    1. Given your answer to #6 above, what should the target nominal federal funds rate be? _________



    1. Assume the neutral real rate of interest is 2%, a target rate of inflation of 2% and ay and aπ are both 1. With an adverse supply shock creating a negative output gap of 2% and inflation rising to 4%, what is the Taylor Rule target real federal funds rate? ________



    1. Assume the neutral real rate of interest is 2%, a target rate of inflation of 2% and ay and aπ are both 1. With a recession creating an output gap of -3% and inflation falling to 0%, what is the Fedís target real federal funds rate by Taylorís Rule? ________



    1. Explain whether the Fed will be able to move the real federal funds rate to the target value in #9 above.
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  2. #2
    MHF Contributor
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    Re: GDP and Interest rates? Need help ASAP

    what will you learn if i answer these for you? post your attempt.
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  3. #3
    Junior Member
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    Re: GDP and Interest rates? Need help ASAP

    I just need the equations to do the problems...I have 3% for the first one and -5% for the second
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