Suppose the equilibrium real federal funds rate is 2


Suppose the equilibrium real federal funds rate is 2 percent, the target rate of inflation is 2 percent, the current inflation rate is 3 percent, real GDP is 17.17 trillion, and potential real GDP is $17 trillion. If the weights for the inflation gap and the output gap are both 1/2, then according to the Taylor rule the federal funds target rate equals?

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Business Economics: Suppose the equilibrium real federal funds rate is 2
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