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According to the Taylor Rule, If the Current Inflation Rate

Question 27

Multiple Choice

According to the Taylor rule, if the current inflation rate is 2.8%, output is 2% below the full-employment level, and the central bank's announced inflation target is 2%, at what level should the central bank set the nominal interest rate?


A) 2) 8%
B) 4) 2%
C) 5) 2%
D) 5) 8%
E) 6) 8%

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