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Using the Taylor rule and the following information estimate short-term interest rate level to be used by the monetary policymakers. Also explain why the monetary
Using the Taylor rule and the following information estimate short-term interest rate level to be used by the monetary policymakers. Also explain why the monetary action suggested by the Taylor rule output may not be actually taken by the policymakers. Measure GDP growth Inflation rate Short-term neutral rate Long-run trend 3.5% 2.5% 2.5% Forecast 2.5% 4% 2.75%
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