According to the IS-MP-PC Model, an Increase in the Target

question 38

Multiple Choice

According to the IS-MP-PC model, an increase in the target inflation rate causes

• A)an upward shifts of the AD curve.
• B)no change in the AD curve.
• C)a downward shift in the AD curve.
• D)it depends.

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Definitions:

Sales Tax

A tax imposed by a government on sales of goods and services, typically calculated as a percentage of the purchase price.

Constant Rate

A stable speed or frequency at which something happens or changes over a particular period of time.

Constant-Rate

Pertaining to a process or quantity that changes over time at an unvarying speed or amount.

Progressive Tax

A tax system where the tax rate increases as the taxable amount increases, placing a heavier burden on wealthier taxpayers.