Imagine you are the chief economist at the Fed and you are trying to convince the Fed governor that she should follow the Taylor rule when setting the fed funds rate.

"I don't like this Taylor rule," she says. "I think I can do better than the rule."

"However, with the Taylor rule you do not have to think what to do. You just observe the inflation rate and the output growth, and set the interest rate accordingly," you say.

"But what would I have to do if output falls way too much and we hit the zero lower bound?" she says.

"Look, I suggest the following Taylor rule: , where is inflation and y is the deviation of output from the full-employment level," you say in response. "With this rule you will only reach the zero lower bound if:

a. output falls 5% below the full employment level and inflation accelerates to 10%

b. output falls by 6% below the full-employment level, while inflation remains at the current 2%.

c. output remains above the full-employment level, while inflation drops below zero.

d. output is at the full-employment level, while inflation recedes from the current 2% to 1%.

Shareholders of tesla recently expressed concerns that elon musk should give up some of his power on tesla's board by appointing two independent directors. which of the following is not a reason why elon musk is perceived to have significant power over tesla's board? 1. he is the founder of the firm and a successful entrepreneur, thus board members may be hesitant to challenge him.2. as the ceo and chairman of the firm he can easily determine what the board should discuss and how it should vote on strategic issues.3. all board members, except for kimbal, have been appointed to the board during elon's tenure.4. many of the firm's directors are outsider investment managers whose interests would not be aligned with those of firms' shareholders.

Granby foods' (gf) balance sheet shows a total of $25 million long-term debt with a coupon rate of 8.50%. the yield to maturity on this debt is 8.00%, and the debt has a total current market value of $27 million. the company has 10 million shares of stock, and the stock has a book value per share of $5.00. the current stock price is $20.00 per share, and stockholders' required rate of return, r s, is 12.25%. the company recently decided that its target capital structure should have 35% debt, with the balance being common equity. the tax rate is 40%. calculate waccs based on book, market, and target capital structures. what is the sum of these three waccs?

Uppose that the federal reserve purchases a bond for $100,000 from donald truck, who deposits the proceeds in the manufacturer’s national bank. what will be the impact of this purchase on the supply of money? the money supply will increase by $100,000. the money supply will increase by $80,000. the money supply will increase by $500,000. this action will have no effect on the money supply. if the reserve requirement ratio is 20 percent, what is the maximum amount of additional loans that the manufacturer’s bank will be able to extend as the result of truck’s deposit? the maximum additional loans is $100,000. the maximum additional loans is $80,000. the maximum additional loans is $20,000. the maximum additional loans is $500,000. given the 20 percent reserve requirement, what is the maximum increase in the quantity of checkable deposits that could result throughout the entire banking system because of the fed’s action? this action will have no effect on the money supply. the money supply will eventually increase by $80,000. the money supply will eventually increase by $500,000. the money supply will eventually increase by $100,000.