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Using the Taylor Rule, If the Current Inflation Rate Equals

Question 141

Multiple Choice

Using the Taylor rule, if the current inflation rate equals the target inflation rate and real GDP equals potential GDP, then the overnight interest rate target rate equals the


A) current discount rate.
B) current inflation rate.
C) equilibrium real overnight interest rate.
D) current inflation rate plus the real equilibrium overnight interest rate.
E) current unemployment minus the natural rate of unemployment.

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