Multiple Choice
Assuming the Fed is following the Taylor Rule, if inflation is 3 percent, target inflation is 2 percent, and output is 1 percent above potential, what would you predict would be the Fed funds rate target?
A) 4 percent
B) 5 percent
C) 5.5 percent
D) 6 percent
Correct Answer:
Verified
Correct Answer:
Verified
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