Central Bankers with a Relatively Flat Monetary Policy Reaction Curve

question 63

Multiple Choice

Central bankers with a relatively flat monetary policy reaction curve will:

• A)Move interest rates more aggressively when inflation rises, leading to more volatility in output
• B)Move interest rates more aggressively when inflation rises, leading to less volatility in output
• C)Move interest rates less aggressively when inflation rises, leading to more volatility in output
• D)Move interest rates less aggressively when inflation rises, leading to less volatility in output

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