Suppose the the equilibrium real federal funds rate is 4 percent and the target rate of inflation of 1 percent. Use the following information and the Taylor rule to calculate the federal funds rate target.
Current inflation rate = 4 percent
Potential real GDP = $14.72 trillion
Real GDP = $14.81 trillion
The federal funds target rate is ___%
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Home » Business » Suppose the the equilibrium real federal funds rate is 4 percent and the target rate of inflation of 1 percent. Use the following information and the Taylor rule to calculate the federal funds rate target.