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The Taylor rule expresses the federal funds rate as the weighted average of: a/ the CPI...

The Taylor rule expresses the federal funds rate as the weighted average of:

a/ the CPI and real GDP

b/ inflation and short-run output

c/ he misery index, the money growth rate, and the mortgage rate

d/the unemployment rate and inflation

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Answer #1

Answer : The answer is option d.

Taylor rule shows that the federal fund rate is a function of inflation and unemployment rate. Hence except option d other options are not correct. Therefore, option d is the correct answer.

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