What does the Taylor rule imply that policymakers should do to
the fed funds rate

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Question: What does the Taylor rule imply that policymakers should do to the fed funds rate under the follo…
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under the following scenarios?

a. Unemployment rises due to a recession.

b. An oil price shock causes the inflation rate to rise by 1%
and output to fall by 1%.

c. The economy experiences prolonged increases in productivity
growth while actual

output growth is unchanged.

d. Potential output declines while actual output remains
unchanged.

e. The Fed revises its (implicit) inflation target down

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