According to the Taylor Rule, if the output gap rises by 3% and inflation falls by 1%, then the federal funds rate should
A) fall by 2%.
B) fall by 1%.
C) remain unchanged.
D) rise by 1%.

Question

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The Answer of According to the Taylor Rule, if the output gap rises by 3% and inflation falls by 1%, then the federal funds rate should
A) fall by 2%.
B) fall by 1%.
C) remain unchanged.
D) rise by 1%.

According to the Taylor Rule, If the Output Gap Rises