Suppose that the current real federal funds rate in the economy is 2.0%, the current inflation rate is 1.0%, the Federal Reserve's target inflation rate is 2.0%, and the output gap is –2.0%. According to the Taylor Rule, how much should be the Federal Reserve's target federal funds rate? Please show your work. [Hint: According to the Taylor Rule, the FF Target = Real FF Rate + Inflation Rate + 0.5 (Inflation Gap) + 0.5 (Output Gap)].

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