A Decrease in the Inflation Target by the Central Bank

question 92

Multiple Choice

A decrease in the inflation target by the central bank would:

• A) have no impact on the positioning of the dynamic aggregate demand curve.
• B) cause the dynamic aggregate demand curve to shift to the left.
• C) cause the dynamic aggregate demand curve to shift to the right.
• D) be reflected by a movement down and along the existing dynamic aggregate demand curve.

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