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What does the Taylor rule imply that policymakers should do to the fed funds rate under the following scenarios? ***Unemployment declines due to a recovery.
What does the Taylor rule imply that policymakers should do to the fed funds rate under the following scenarios?
***Unemployment declines due to a recovery.
***A positive supply-side shock causes the rate of inflation to fall by 1% and output to rise by 1%.
***The economy experiences prolonged reductions in productivity growth while actual output growth is unchanged.
***Potential output increases while actual output remains unchanged.
***The Fed revises its (implicit) inflation target up.
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