Question

Suppose that actual inflation is 3 percent, the Fed's inflation target is 2 percentage points, and unemployment rate is 2 (which is 2 percent below the Fed's full-employment target of 4 percent). According to the Taylor Rule, what value will the Fed want to set for its targeted interest rate?

Instructions: Enter your answer rounded to 1 decimal place.

Answer 1

The employees rate would be 4% depending on how many days and how many hours they are working the Taylor rule would be 15