If Monetary Policymakers Are More Concerned About Output Fluctuations Than

question 42

Multiple Choice

If monetary policymakers are more concerned about output fluctuations than inflation fluctuations:

• A) they will choose a relatively steep monetary policy reaction curve in which movements in the real interest rates are small.
• B) they will choose a relatively flat monetary policy reaction curve in which movements in the real interest rates are small.
• C) they will choose a relatively steep monetary policy reaction curve in which movements in the real interest rates are large.
• D) they will choose a relatively flat monetary policy reaction curve in which movements in the real interest rates are large.

---

Definitions:

Avoided

Deliberately staying away from or not doing something.

Listening

The active process of receiving, interpreting, and responding to verbal messages and non-verbal cues.

Resistant

The quality of being opposed to or defending against something, such as change, disease, or certain materials and substances.

Ideas

Mental concepts or thoughts that represent a person's understanding or imagination, which can be the basis for creativity, problem-solving, and innovation.