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QUESTION 7 Consider the following Taylor rule i=0.02+0.5y+0.5(r-2% ) where y is the percentage difference between the actual output and its full-employment level, while 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 April, 2050 May, 2050 June, 2050 July, 2050 August, 2050 September, 2050 October, 2050 November, 2050 100.00 100.00 100.00 100.00 101.41 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 98.40 100.00 99.95 101.82 100.00 98.54 98.83 December, 2050 January, 2051 100.00 97.52 98.68 100.00 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(r-2% ) where y is the percentage difference between the actual output and its full-employment level, while 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 April, 2050 May, 2050 June, 2050 July, 2050 August, 2050 September, 2050 October, 2050 November, 2050 100.00 100.00 100.00 100.00 101.41 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 98.40 100.00 99.95 101.82 100.00 98.54 98.83 December, 2050 January, 2051 100.00 97.52 98.68 100.00 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.

Economics:
Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles
Section: Chapter Questions
Problem 9E
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Price level in January 2051 is 98.1

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 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 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 June, 2050 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.
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 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 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 June, 2050 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.
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