Solved: Suppose that inflation is 2 percent the federal funds rate, Macroeconomics

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Suppose that inflation is 2 percent the federal funds rate

Suppose that inflation is 2 percent, the federal funds rate is 4 percent, and real GDP is 2 percent above potential GDP. According to the Taylor rule, in what direction and by how much should the Fed change the real federal funds rate?

Instructions: Round your answer to 2 decimal places.

The federal funds rate by percent.

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Macroeconomics: Suppose that inflation is 2 percent the federal funds rate

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Macroeconomics: Suppose that inflation is 2 percent the federal funds rate

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