Suppose the Central Bank of Kandor has a current federal funds rate of 3%. They are presented with the following information: current inflation rate 2%; inflation rate target 4%; current GDP is 4% above than full-employment GDP. According to the Taylor rule, which policy approach should the Central Bank use to reach its goal? accommodative monetary policy O tight money policy O No change in monetary policy is needed since the federal funds rate is at the desired level. O contractionary fiscal policy

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