Figure 12.6: IS-MP Curve

Multiple Choice

Figure 12.6: IS-MP Curve
-Start from any equilibrium in Figure 12.6 to answer the following question. In 1980, U.S. inflation hit about 14 percent; Federal Reserve chairman ________ engineered a decline in inflation by ________, shown in the figure as movement from ________.

A) Volcker; raising inflation rates; point b to c
B) Bernanke; raising interest rates; point b to d
C) Volcker; lowering interest rates; point c to b
D) Volcker; raising interest rates; point b to c
E) Greenspan; lowering interest rates; point a to b