Answer: 0.50%; 25%
Explanation:
Given that,
On April 1,
Price of gas at Bob’s Corner Station = $3.80 per gallon
On May 1,
Price = $4.30 per gallon
On June 1,
Price = $3.80 per gallon
Federal funds rate rises from 2% to 2.5%
Change in Federal funds rate = 2.5% - 2%
= 0.50%
It raises its target by approximately = [tex]\frac{100\times0.50}{2}[/tex]
= 25%
