Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:Real Interest
Rate, r (percent)
F
G
K
Inflation Rate,
(percent)
10. Referring to the graph above, a movement from point F to point G might represent
A. H to I
B. K to G
C. G to J
D. I to H
E. K to F
A. the automatic response of monetary policy to an increase in the inflation rate
B. the increase in the inflation rate that occurs when the real interest rate rises
C. an autonomous tightening of monetary policy
D.
any of the above
E. none of the above
11. On the graph above, which pair of points best represents the impacts in the U. S. of
autonomous easing of monetary policy at the Onset of the 2007-2013 Financial Crisis?
12. The IS curve is Y = 30 - 2r, and the aggregate demand curve is Y = 18 - T.
Then, the monetary policy curve is
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