1 assume that inflation is currently 4 but the fedrsquos, Business Economics

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1 assume that inflation is currently 4 but the fedrsquos

1. Assume that inflation is currently 4% but the Fed’s inflation target is 2%

A - if the economy is currently at full employment, what should the Fed choose as a target for the federal funds rate?

B - at what level should the Fed set the federal funds rate if the economy is 2% above potential GDP?

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Business Economics: 1 assume that inflation is currently 4 but the fedrsquos

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Business Economics: 1 assume that inflation is currently 4 but the fedrsquos

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