Question

Which of the following is NOT a basis for the Taylor -rule guideline for how the Federal Reserve should set its target value for the federal funds rate?

A) an estimated long-run real interest rate

B) the current deviation of the actual inflation rate from the Fedʹs inflation objective

C) the present deviation of the actual unemployment rate from the Fedʹs unemployment objective

D) the gap between actual real GDP and a measure of potential real GDP

Answer

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