The target inflation rate is 2 percent a year and the actual inflation rate is 8 percent a year. There is no output gap. According to the Taylor Rule, the federal funds rate is [1].
The target inflation rate is 2 percent a year and the actual inflation rate is 8 percent a year. There is no output gap. According to the Taylor Rule, the federal funds rate is [1].
Chapter15: Monetary Policy
Section15.4: Nonactivist Monetary Proposals
Problem 2ST
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