The equilibrium real federal funds rate

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Reference no: EM131109860

Suppose that the equilibrium real federal funds rate is at 4% and the target rate of inflation is 1 percent. Use the following information and the Taylor rule to calculate the federal funds rate target:

Current inflation rate = 5 percent

Potential real GDP = $14.66 trillion

Real GDP = $14.24 Trillion

The bederal funds target rate is _% (rounded answer to two decimal places.)

Reference no: EM131109860

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