Question Completion Status: Suppose that the current rate of inflation is 4% and the target rate of inflation is 2%, and output is 3% above its potential. What do you expect the Fed Funds target rate may be using the Taylor Rule? O 7% 8.5% 5% O 4.5% QUESTION 31 Assume that the economy is currently experiencing a large recessionary gap. In order to increase aggregate demand, the Fed could the required reserve ratio, the Discount Rate, and/or government securities (T-bonds, T-bills) to/from commercial banks. O increase; increase; buy O decrease; decrease; sell O increase; decrease; sell O decrease; decrease; buy Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers