According to the Taylor rule, the Fed will set the federal funds rate target based on which of the following?

Question

Quizplus · Accepted Answer

According to the Taylor rule, the Fed will set the federal funds rate target based on all of the following factors: an estimated long-run real interest rate, the current deviation of the actual inflation rate from the Fed's inflation objective, and the proportionate gap between actual real GDP and a measure of potential real GDP.

According to the Taylor Rule, the Fed Will Set the Federal