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Based on the Information Below and the Taylor Rule, What

Question 263

Multiple Choice

Based on the information below and the Taylor Rule, what is the appropriate target for the overnight rate? Current inflation = 9% Equilibrium real interest rate = 0% Inflation target = 2%
Output Gap = 1% Unemployment rate = 10.3%


A) 13%
B) 13.5%
C) 16.5%
D) 8.5%
E) 23.3%

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