Answer:
correct option is D raise the fed funds rate by 0.5% if inflation rises 1% above its target of 2%
Explanation:
solution
Taylor Rule is invented in 1992 and it is interest rate forecasting model
As the product of John Taylor Rule is the 3 number
- interest rate
- inflation rate
- GDP rate
and Taylor rule is that when GDP is equal to potential GDP and inflation rate is at its target rate of 2%
and the federal funds target rate should be 4%
so we can say here correct option is D raise the fed funds rate by 0.5% if inflation rises 1% above its target of 2%
Built between 1817 and 1825, the original Erie Canal traversed 363 miles from Albany to Buffalo. It was the longest artificial waterway and the greatest public works project in North America. The canal put New York on the map as the Empire State—the leader in population, industry, and economic strength.
