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If the Federal Reserve Raises Its Target Inflation Rate, the Monetary

Question 125

Multiple Choice

If the Federal Reserve raises its target inflation rate, the monetary policy reaction function ________ and the aggregate demand curve ________.


A) shifts upward to the left; shifts to the right
B) shifts downward to the right; shifts to the right
C) shifts upward to the left; shifts to the left
D) shifts downward to the right; shifts to the left

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