The Graph Above Shows a Central Bank Targeting an Interest

question 3

Multiple Choice

The graph above shows a central bank targeting an interest rate i_T. This policy is said to be destabilizing since the change in output from _____ is greater than the change in output from

• A) A to B, B to C.
• B) A to C, A to B.
• C) A to C, B to C.
• D) none of the above.