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1. Suppose the current rate of inflation is 6% and the real GDP is 3% less than potential. Use the Taylor Rule to determine the

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1. Suppose the current rate of inflation is 6% and the real GDP is 3% less than potential. Use the Taylor Rule to determine the prescribed federal funds rate. Which part of the dual mandate is being emphasized? 2. Suppose the current rate of inflation is 2%, real GDP is 800 , and potential GDP is 790 . Use the Taylor Rule to determine the prescribed federal funds rate. Which part of the dual mandate is being emphasized? 3. Explain why the Fed targets 2% inflation over time

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