In the IS-MP Model,when the Fed Increases the Real Interest

question 80

Multiple Choice

In the IS-MP model,when the Fed increases the real interest rate

• A) the MP curve shifts up resulting in a decline in the output gap.
• B) the MP curve shifts up resulting in an increase in the output gap.
• C) the MP curve shifts down resulting in a decline in the output gap.
• D) the MP curve shifts down resulting in an increase in the output gap.

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