Suppose that the Fed’s inflation target is 2%, potential output growth is 3.5&, and velocity is a function of how…

Suppose that the Fed’s inflation target is 2%, potential output growth is 3.5&, and velocity is a function of how much the interest rate differs from 5%: %triangleV= 0.5*(i-5) Suppose tht a model of the economy suggest that the real interest rate is determined by the equation. r=8.5-%triangleY