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13 13. Using the Taylor rule formula, the current rate of inflation is 5 percent, the natural rate of interest is 2percent, the target rate
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13. Using the Taylor rule formula, the current rate of inflation is 5 percent, the natural rate of interest is 2percent, the target rate of inflation is 2percent, and output is 3percent above its potential, the target federal funds rate would be: A. 2.5%. B. 6.5%. C. 9.5%. D. 10% Step by Step Solution
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