Multiple Choice
According to the general MP rule of the IS-MP-PC model, a 1% increase in the inflation rate lead the central bank to:
A) lower the real interest rate by 1%.
B) not change the nominal interest rate.
C) raise the real interest rate by more than 1%.
D) raise the nominal interest rate by more than 1%.
Correct Answer:
Verified
Correct Answer:
Verified
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