Multiple Choice
If the slope of the monetary policy rule line is 2, then when inflation rises by 1 percent, the
A) nominal interest rate rises by 2 percent.
B) nominal interest rate rises by 1 percent.
C) nominal interest rate rises by 3 percent.
D) real interest rate rises by 2 percent.
E) real interest rate rises by 3 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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