Consider the Taylor​ rule, as defined in the textbook. Suppose the equilibrium real federal funds rate is​ 0.5%, the inf

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answerhappygod
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Consider the Taylor​ rule, as defined in the textbook. Suppose the equilibrium real federal funds rate is​ 0.5%, the inf

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Consider the Taylor​ rule, as defined in the textbook.
Suppose the equilibrium real federal funds rate is​ 0.5%, the
inflation rate is​ 8%, the target inflation rate
is​ 2.5%, and the output gap is​ 2%. What is the federal
funds target​ rate?
A.
​0.5%
B.
​12.75%
C.
​0.25%
D.
​12.25%
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