Suppose that the Reserve Bank of New Zealand is following the Taylor rule and in 2018, it
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Suppose that the Reserve Bank of New Zealand is following the Taylor rule and in 2018, it sets the official cash rate (its equivalent of the federal funds rate) at 4 percent a year. If the inflation rate in New Zealand is 2 percent a year, what is its output gap?
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The Taylor rule is an economic concept that suggests how a central bank like the Reserve Bank of New ...View the full answer
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