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In 2013, John Taylor wrote: "I realize that there are differences of opinion about what is the best rule to guide policy and that some at the Fed (including Janet Yellen) now prefer a rule with a higher coefficient [on the output gap]."
a. If Fed policy were guided by a Taylor rule with a coefficient of 1, rather than 0.5, on the output gap, would the federal funds rate be higher or lower during a recession? Briefly explain.
b. Why might economists and policymakers disagree over the best rule to guide monetary policy?
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x y 6step 1 the lagrangian function is set asstep 2 take the first order partial derivatives of the lagrangian and set
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The United States has been the largest exporter of corn for over 40 years. How can Economics and comparative advantage explain this? Other countries have no use for corn since they produce other foods.
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