For a Macroeconomic Policy Curve of the ForY ^ˆ Higher

question 11

Multiple Choice

For a macroeconomic policy curve of the forY ^ˆ higher inflation means

• A) lower aggregate demand because the Fed raises interest rates according to its policy rule.
• B) higher aggregate demand because higher interest rates produce higher levels of net exports.
• C) higher aggregate demand because higher interest rates increase personal consumption.
• D) b and c.
• E) none of the above.

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