Give typing answer with explanation and conclusion    The Taylor rule sets the federal funds rate (FFR) according to INF (the inflation rate) and GAP (the output gap). What is the inflation that expresses this relationship?   A. FFR = 0.5 + INF + 2(INF + 0.5) minus −2GAP   B. FFR = 2 + INF + 0.5(INF minus −2) + 0.5GAP   C. FFR = 2 + INF + 0.5(INF + 2) minus −0.5GAP   D. FFR = 0.5 + INF + 2(INF minus −0.5) + 2GAP

Principles of Macroeconomics (MindTap Course List)
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Chapter23: Six Debates Over Macroeconomic Policy
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Give typing answer with explanation and conclusion 

 

The Taylor rule sets the federal funds rate (FFR) according to INF (the inflation rate) and GAP (the output gap). What is the inflation that expresses this relationship?

 

A. FFR = 0.5 + INF + 2(INF + 0.5) minus −2GAP

 

B. FFR = 2 + INF + 0.5(INF minus −2) + 0.5GAP

 

C. FFR = 2 + INF + 0.5(INF + 2) minus −0.5GAP

 

D. FFR = 0.5 + INF + 2(INF minus −0.5) + 2GAP

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