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According to the Taylor Rule, When Real GDP Is Below

Question 27

Multiple Choice

According to the Taylor rule, when real GDP is below its natural level, the nominal federal funds rate should be _____, and when inflation exceeds 2 percent, the nominal federal funds rate should be _____.


A) raised; raised
B) raised; lowered
C) lowered; raised
D) lowered; lowered

Correct Answer:

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