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06-12-2019
Business

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Suppose that the Fed had followed the Taylor rule before the financial crisis of 2008. In the first quarter of 2007, the inflation rate was 2.5 percent a year and the output gap was zero. At what level would the Fed have set the federal funds rate target?

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cancinodavidq cancinodavidq

09-12-2019

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.

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