If Monetary Policymakers Fear a Recession Resulting from Increased Pessimism

question 51

Multiple Choice

If monetary policymakers fear a recession resulting from increased pessimism on the part of business people, and they want to avoid the recession, they would:

• A) shift the monetary policy reaction curve to the right.
• B) shift the monetary policy reaction curve to the left.
• C) likely lower their target rate for inflation.
• D) encourage fiscal policymakers to act.

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