A Central Bank That Chooses a Small Value Of $\theta$ _$\pi$

Multiple Choice

A central bank that chooses a small value of $\theta$ _$\pi$ , the responsiveness of nominal interest rates to inflation, and a large value of $\theta$ _Y, the responsiveness of nominal interest rates to output, is choosing to obtain less _____ at the expense of more _____.

A) inflation; output
B) output; inflation
C) inflation variability; output variability
D) output variability; inflation variability