If the Inflation Rate Target Is 2%,the Current Inflation Rate

question 42

Multiple Choice

If the inflation rate target is 2%,the current inflation rate is 3%,and the output gap is 2%,then according to the Taylor rule,the nominal federal funds rate should be ________ percent.

• A)4.5
• B)7
• C)6.5
• D)5.5
• E)none of the above

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