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rsteel rsteel
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A year ago
Taylor Rules

Suppose the target rate of inflation is 3%, the current inflation rate is 7%, the equilibrium real federal funds rate is 1%, and real GDP is 1% above potential real GDP. If the weights for both the output gap and the inflation gap are 1/2, then according to the Taylor rule the federal funds target rate equals ________. (Round to the nearest tenth when appropriate.)

▸ 6%

▸ 4%

▸ 12%

▸ 10.5%
Textbook 
Macroeconomics

Macroeconomics


Edition: 3rd
Authors:
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tkane127tkane127
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A year ago
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rsteel Author
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A year ago
Thanks for your help!!
Hellish Lover
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Thanks
paulinaibarra98
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Helped a lot
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