Question
Suppose that in 1980, the U.S. inflation rate was 12.5 percent and the unemployment rate reached 7.4 percent. Suppose that the target rate of inflation
Suppose that in 1980, the U.S. inflation rate was 12.5 percent and the unemployment rate reached 7.4 percent. Suppose that the target rate of inflation was 2.5 percent back then and the full-employment rate of unemployment was 5.5 percent at that time. What value does the Taylor Rule predict for the Fed's target interest rate?
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Intermediate Microeconomics and Its Application
Authors: Walter Nicholson, Christopher M. Snyder
12th edition
978-1133189022, 1133189024, 1133189032, 978-1305176386, 1305176383, 978-0357687000, 978-1133189039
