Given the following information and using the taylor rule, Ask an Expert

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Given the following information and using the Taylor rule, calculate the target for the federal funds rate for October 2012 Equilibrium real federal funds rate of 2% Target inflation rate of 2% Current inflation rate of 1.2% Output gap negative 5.9% a. Calculate the target for the federal funds rate for October 2012 b. Explain how the targeted federal funds rate calculated using the Taylor rule compare to the actual federal funds rate of 0% to 0.25%. c. Explain the deviation in the actual federal funds rate from the targeted federal funds rate calculated using the Taylor rule

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Financial Management, Finance

Category:- Financial Management
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