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According to the Taylor rule, when the economy is at full employment and inflation is at its target rate of 2 percent, the Fed should

Answer

Based on the current state of the economy, there is no need for the Fed to raise interest rates. The Taylor rule is a valuable tool used by central banks to gauge how interest rates should fluctuate based on economic conditions. According to Taylor's rule, if the inflation rate or GDP growth rate is higher than desired, the Fed should raise interest rates accordingly. However, with the current level of full employment and inflation rate at 2 percent, the economy is performing well. Therefore, it is unnecessary for the Fed to increase interest rates at this time. In conclusion, the economy is at a favorable state, and there is no need for the Fed to raise interest rates. For more information on the Taylor rule, please refer to brainly.com/question/4281812.