The new chairman of the Ionian Central Bank (ICB) is preparing for her first board meeting. She is expected to recommend a monetary policy for the board to pursue. She decides to use the Taylor rule, which was originally developed for the U. S. Federal Reserve. Ionia's potential GDP is 100 million drachma, but current GDP is 102 million . What is Ionia's output gap?
Ionia's output gap: %

Inflation is running at 6%, but the chairman considers an inflation rate of 3% to be a reasonable goal. What is Ionia's inflation gap?
Ionia's inflation gap: %

The Taylor rule helps the chairman to determine the target
- fed funds rate.
- discount rate.
- inflation rate.

Calculate this target rate for Ionia, according to the Taylor rule.
target rate: %

The current rate is 4%, so the chairman recommends
- buying securities.
- selling securities.

An employee of the state government always received his state paycheck on the last workday of the month. the employee was not a good money manager, and just barely managed to make it from paycheck to paycheck each month. on the second to the last workday of the month, the employee had $45 in his checking account, and, needing to buy a birthday gift for his sister, he wrote a check to a gift boutique for $100. he knew that he would be receiving his paycheck the next day, so he could deposit the paycheck before the check would be sent to the bank.however, unbeknownst to the employee, the state legislature was having a budget impasse. because the state constitution prohibited any deficit spending, state employees were not paid as usual. without a paycheck to deposit, the check written to the gift boutique was returned for insufficient funds. the merchant complained to the police, who arrested the employee and charged him under a statute that prohibited "issuing a check knowing that it is drawn against insufficient funds, with intent to defraud the payee of the check."what should be the outcome of the employee's prosecution? a not guilty, because the employee intended to deposit his paycheck the next day.b not guilty, because it was reasonable for the employee to expect that he would receive his paycheck as usual.c guilty, because the employee knew when he wrote the check that he did not have sufficient funds in his account to honor it.d guilty, because reliance on a future source of income does not vitiate the employee's violation of the statute when he wrote the check.