According to the Taylor Rule, if the output gap falls by 2% and the inflation gap rises by 1%, then the real federal funds rate should be
A) lowered by 1.0%.
B) lowered by 0.5%.
C) left unchanged.
D) raised by 1.0%.

Question

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The Answer of According to the Taylor Rule, if the output gap falls by 2% and the inflation gap rises by 1%, then the real federal funds rate should be
A) lowered by 1.0%.
B) lowered by 0.5%.
C) left unchanged.
D) raised by 1.0%.

According to the Taylor Rule, If the Output Gap Falls