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If Monetary Policymakers Respond Aggressively to Current Inflation Above the Target

Question 9

Multiple Choice

If monetary policymakers respond aggressively to current inflation above the target inflation rate, the:


A) Monetary policy reaction curve would be flat
B) Dynamic aggregate demand curve would have a steep slope
C) Monetary policy reaction curve would have a positive and steep slope
D) Dynamic aggregate demand curve would shift rightward

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