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According to the Taylor rule, for a given inflation rate, ________.

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According to the Taylor rule, for a given inflation rate, ________.

According to the Taylor rule, for a given inflation rate, ________.

▸ every percentage point increase in the inflation rate increases the federal funds rate by 1.5 percentage points

▸ every percentage point increase in the nominal interest rate increases the federal funds rate by 1 percentage point

▸ if bank reserves double, the federal funds rate should double

▸ if nominal output doubles, the federal funds rate should double

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Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

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This helped my grade so much Perfect

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