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Taylor Rules and Short-Run Exchange Rate movements for inflation targeting central banks. Consider the following Taylor Rule for the nominal short-term U.S. policy interest rate

Taylor Rules and Short-Run Exchange Rate movements for inflation targeting central banks. Consider the following Taylor Rule for the nominal short-term U.S. policy interest rate ($): = (  ) ()(  ) Where:    US inflation target    US real potential output growth Assume  (0,1) a. Calculate the marginal effect of a rise in actual inflation () on the nominal US policy interest rate. (Hint: calculate $ ).

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