Question

question 15
fill in the blank: inflation rates greater than ______ represent a dangerous zone that could cause the currency to become devalued.
a. 0%
b. 1%
c. 2%
d. 3%

question 16
what is the rule that has an econometric model that says the federal reserve should raise interest rates when inflation or gross domestic product (gdp) growth rates are higher than desired.
a. the federal rule
b. the grandfather clause
c. the interest clause
d. the taylor rule

Explanation:

Question 15

In economic terms, an inflation rate greater than 3% is often considered a dangerous zone as it can lead to currency devaluation due to rising prices eroding the currency's value. Options a (0%), b (1%), and c (2%) are either too low or within acceptable inflation targets in many economies, while 3% and above can signal overheating and devaluation risks.

The Taylor Rule is an econometric model that guides the Federal Reserve on interest rate adjustments. It suggests raising rates when inflation or GDP growth exceeds desired levels to stabilize the economy. The other options (The Federal Rule, The Grandfather Clause, The Interest Clause) are not related to this econometric model for Fed's rate decisions.

Answer:

d. 3%

Question 16