For a Macroeconomic Policy Curve of the ForY ^ˆ Higher

Multiple Choice

For a macroeconomic policy curve of the forY ^ˆ higher inflation means

A) lower aggregate demand because the Fed raises interest rates according to its policy rule.
B) higher aggregate demand because higher interest rates produce higher levels of net exports.
C) higher aggregate demand because higher interest rates increase personal consumption.
D) b and c.
E) none of the above.