Multiple Choice
Suppose the inflation rate target is zero and the long-run federal funds target is also zero.If the inflation rate is 4 percent and the output gap is ‒2 percent,the federal funds rate set by the Taylor rule is ________.
A) 5 percent
B) 6 percent
C) 2 percent
D) 8 percent
Correct Answer:
Verified
Correct Answer:
Verified
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