Suppose that in 1980, the U.S. inflation rate was 14 percent and the unemployment rate reached 7.6 percent. Suppose that the target rate of inflation was 3 percent back then and the full-employment rate of unemployment was 5.5 percent at that time. What value does the Taylor Rule predict for the Fed's target interest rate? Instructions: Enter your answer rounded to 2 decimal places.

Suppose that in 1980, the U.S. inflation rate was 14 percent and the unemployment rate reached 7.6 percent. Suppose that the target rate of inflation was 3 percent back then and the full-employment rate of unemployment was 5.5 percent at that time. What value does the Taylor Rule predict for the Fed's target interest rate? Instructions: Enter your answer rounded to 2 decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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