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What does the Taylor rule imply that policymakers should do to the overnight funds rate under the following scenarios? i. Unemployment falls as the economy
What does the Taylor rule imply that policymakers should do to the overnight funds rate under the following scenarios?
i. Unemployment falls as the economy is growing.
ii. An oil price shock causes the inflation rate to fall by 1% and output to rise by 1%. (Please give a numeric answer)
iii. The economy experiences prolonged increases in productivity growth while actual output growth is unchanged.
iv. Potential output declines while actual output remains unchanged.
v. The Bank of Canada revises its (implicit) inflation target upward.
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