Taylor rule: it= r*+ t + a1(t-*) + a2(yt-yt*), where it is the short-term nominal interest rate; r* is a "normal" or long-term average real interest rate; t- is the inflation rate; * is the target inflation rate; yt is the logarithm of real output; and yt* is the logarithm of a "normal" ("potential") level of output. The parameters a1 and a2 indicate the sensitivity of the interest rate to inflation and output. Use a1 = a2 = 1/2. Let long-term interest rate be 3%, inflation rate= 4%, the target inflation rate= 2%, the real output (in the log-terms)= 0.2, and the potential output (in the log-terms)=0.1. Use the Taylor rule to find the short-term nominal interest rate. A. 8.1% B. -2.1% C. 4.5% D. 5.6%