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Unformatted text preview: a. Using the two guidelines and the current inflation and real GDP growth rates, determine the appropriate Fed Funds Rate. b. Note that the parameters on the inflation and output gaps are not equal. What does this specification indicate about the FOMC’s stance on inflation and real economic growth? c. If the current Fed Funds Rate is 3%, explain what the Fed must do with its open market operations to achieve its new Fed Funds Rate Target....
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This note was uploaded on 03/16/2011 for the course FIN 4324 taught by Professor Clark during the Spring '11 term at FSU.
- Spring '11