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 ________ rates, shown in the figure as movement from point ________.

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