Multiple Choice
Suppose the inflation rate target is zero and the long-run federal funds target is also zero.Calculate the federal funds rate if the current inflation rate is 5 percent and real output is 4.5 percent below the trend output level.
A) 2.25 percent
B) 0.5 percent
C) 5.25 percent
D) 0.25 percent
Correct Answer:
Verified
Correct Answer:
Verified
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