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If potential output declines while actual output remains unchanged​, what does the taylor rule imply that policymakers should do to the fed funds​ rate? based on this​ scenario, policymakers should increase the fed funds rate​ because:

a. the output gap would decrease. nbsp

b. the output gap would increase. nbsp

c. the rate of actual output growth would decline. nbsp

d. changes in potential output nbsp do not influence the fed funds rate.

asked
User Benamar
by
7.6k points

1 Answer

4 votes

Answer:

the rate of actual output growth would decline .nbsp

answered
User Jonhopkins
by
8.2k points
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