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Information for a taylor rule

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Use the following information for a Taylor rule. The equilibrium federal funds rate is 2%, the inflation target is 2% and the output growth target is 3%. Write the Taylor rule with weights of 0.5 on the output and inflation gaps. If actual inflation is 10% and actual output growth is 1%, find the federal funds rate recommended by the Taylor rule.

Reference no: EM132339257

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