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Calculate the federal funds rate target using the Taylor Rule. equilibrium real fed funds rate: 2 % observed inflation: 6 % target inflation: 2 %

Calculate the "federal funds rate target" using the Taylor Rule.

equilibrium real fed funds rate: $2 %$

observed inflation: $6 %$

target inflation: $2 %$

observed GDP: $1 %$

The natural rate of GDP: $2 %$

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