If Monetary Policymakers Respond Aggressively to Current Inflation Above the Target

question 9

Multiple Choice

If monetary policymakers respond aggressively to current inflation above the target inflation rate, the:

• A)Monetary policy reaction curve would be flat
• B)Dynamic aggregate demand curve would have a steep slope
• C)Monetary policy reaction curve would have a positive and steep slope
• D)Dynamic aggregate demand curve would shift rightward

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