If Monetary Policymakers Fear a Recession Resulting from Increased Pessimism

Multiple Choice

If monetary policymakers fear a recession resulting from increased pessimism on the part of business people, and they want to avoid the recession, they would:

A) Shift the monetary policy reaction curve to the right
B) Shift the monetary policy reaction curve to the left
C) Likely lower their target rate for inflation
D) Encourage fiscal policymakers to act