Figure 13.1 -The Aggregate Demand Curves in Figure 13.1 Have a Positively-Sloped

question 59

Multiple Choice

Figure 13.1
-The aggregate demand curves in Figure 13.1 have a positively-sloped portion.The reason this can happen is ________.

• A)sloppy editing
• B)the monetary policy response to declining inflation causes the real interest rate to fall,which causes output to rise
• C)a sudden increase in potential output
• D)changes in expected inflation cause the real interest rate to change in the opposite direction
• E)rising inflation causes financial frictions to increase

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