Suppose that target inflation is 5% and target real GDP growth is 3%.
According to macroeconomic data current inflation is at 8% and real GDP growth is 4%. According to the Taylor Rule what should the federal reserve do?
A. Conduct an open market purchase.
B. Decrease the federal funds rate.
C. Increase the federal funds rate.
D. Increase money supply growth.
Answers: 1
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Suppose that target inflation is 5% and target real GDP growth is 3%.
According to macroeconomic da...
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