The Taylor Rule specifies that the federal funds rate target should be equal to:_________ a) equilibrium federal funds rate + inflation rate +1 b) interest rate - expected inflation rate. c) 1.5 (inflation rate) + 0.5 (GDP gap) + 1. d) 0.5 (inflation rate) +1.5 (GDP gap) + 1

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Answer:A

Explanation:The Taylor Rule specifies that the federal funds rate target should be equal to O equilibrium federal funds rate + inflation rate +1 interest rate - expected inflation rate. 1.5 (inflation rate) + 0.5 (GDP gap) + 1. 0.5 (inflation rate) +1.5 (GDP gap) + 1

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