Suppose a Country Has an Inflation Rate = 4%; Target

Suppose a country has an inflation rate = 4%; target inflation rate = 2%; current federal funds rate = 3%; current GDP is 4% below full-employment GDP. Which statement correctly describes monetary policy actions that would be recommended according to inflation targeting and the Taylor rule?

A) Inflation targeting would recommend contractionary policy; the Taylor rule would recommend contractionary policy.
B) Inflation targeting would recommend contractionary policy; the Taylor rule would recommend expansionary policy.
C) Inflation targeting would recommend expansionary policy; the Taylor rule would recommend expansionary policy.
D) Inflation targeting would recommend expansionary policy; the Taylor rule would recommend contractionary policy.