According to the Taylor rule, the Fed should:

a. lower the fed funds rate by 0.5% if RGDP increases 1.0% over potential GDP.
b. raise the fed funds rate by 0.5% if RGDP increases 1.0% over potential GDP.
c. raise the fed funds rate by 1.0% if RGDP increases 0.5% over potential GDP.
d. raise the fed funds rate by 2.0% if RGDP increases 0.5% over potential GDP.

b