how-would-an-increase-in-the-current-inflation-rate-affect-the-federal-funds-rat

Question

How would an increase in the current inflation rate affect the Federal Funds Rate target according to the Taylor Rule?

Accepted Answer

It would increase the Federal Funds Rate target.

Answer

It would only affect the Federal Funds Rate target if GDP also changes.

Answer

It would have no effect on the Federal Funds Rate target.

Answer

It would decrease the Federal Funds Rate target.