Multiple Choice
According to the Taylor rule, if the central bank announced a zero percent inflation target but the current inflation rate is 2% and output is 2% below the full-employment level, at what level should the central bank set the nominal interest rate?
A) 1%
B) 2%
C) 3%
D) 4%
E) 5%
Correct Answer:
Verified
Correct Answer:
Verified
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