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An outcome of the covid-19 pandemic has been an increase in unemployment. If the inflation gap was zero when the first unemployment numbers were announced,
An outcome of the covid-19 pandemic has been an increase in unemployment. If the inflation gap was zero when the first unemployment numbers were announced, and assuming no change in r* or the natural rate of unemployment, the response of the federal reserve to the unemployment numbers per the taylor rule would be which of the following?
A. decrease in the fed funds rate
B. increase in the fed funds rate
C. to leave the fed funds rate unchanged
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