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If the Inflation Rate Target Is 2%,the Current Inflation Rate

Question 42

Multiple Choice

If the inflation rate target is 2%,the current inflation rate is 3%,and the output gap is 2%,then according to the Taylor rule,the nominal federal funds rate should be ________ percent.


A) 4.5
B) 7
C) 6.5
D) 5.5
E) none of the above

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