Central Bankers with a Relatively Steep Monetary Policy Reaction Curve

Multiple Choice

Central bankers with a relatively steep monetary policy reaction curve will:

A) Move interest rates more aggressively when inflation rises, leading to more volatility in output
B) Move interest rates more aggressively when inflation rises, leading to less volatility in output
C) Move interest rates less aggressively when inflation rises, leading to more volatility in output
D) Move interest rates less aggressively when inflation rises, leading to less volatility in output