Figure 13.1 -Which Is a Plausible Cause of the Movement in Figure

Multiple Choice

Figure 13.1
-Which is a plausible cause of the movement in Figure 13.1 from point 1 to point 2?

A) a change in expectations that causes a decline in the real interest rate for investments
B) a decrease in expected inflation
C) the economy's self-correcting mechanism
D) the central bank achieves a negative value for the nominal interest rate
E) none of the above