The DAD equation is Y=Y,-2(14-rt"), where t represents inflation target which is equal to 4. The DAS equation is THT -1+407,-9.). that is expectations are backward-looking. In period t=0 the economy was in a long-run equilibrium and the nominal interest rate was equal to 7. Taylor's rule says that the central bank raises the nominal interest rate by 2 for each percentage point deviation of inflation from target and by 3 for each percentage point deviation of output from the potential level. In period t=1 the natural real rate of interest (ie the equilibrium real interest rate) increases by 2 and the potential level of output increases from 1000 to 1200. The nominal interest rate in t=1 is equal to (Please fill in a number, percentage values should be provided as numbers greater than 1. For example it interest rate is 10 percent, you should write "10" in the blank space provided) Odpowiedz: The DAD equation is Y=Y,-2(14-rt"), where t represents inflation target which is equal to 4. The DAS equation is THT -1+407,-9.). that is expectations are backward-looking. In period t=0 the economy was in a long-run equilibrium and the nominal interest rate was equal to 7. Taylor's rule says that the central bank raises the nominal interest rate by 2 for each percentage point deviation of inflation from target and by 3 for each percentage point deviation of output from the potential level. In period t=1 the natural real rate of interest (ie the equilibrium real interest rate) increases by 2 and the potential level of output increases from 1000 to 1200. The nominal interest rate in t=1 is equal to (Please fill in a number, percentage values should be provided as numbers greater than 1. For example it interest rate is 10 percent, you should write "10" in the blank space provided) Odpowiedz