Author Question: The aggregate demand curve is Y = 15 - 0.2 when the inflation rate falls from 6 percent to 5 ... (Read 18 times)

savannahhooper · **on:** Jun 30, 2018

The aggregate demand curve is Y = 15 - 0.2 when the inflation rate falls from 6 percent to 5 percent. Then, output increases from 13.8 to 17. The response of monetary policy to the inflation decline has been ________.

A) autonomous tightening
B) automatic adjustment
C) autonomous easing
D) to increase autonomous spending
E) none of the above

Question 2

Anti-inflationary policy is less costly when that policy is anticipated in ________.

A) traditional Keynesian theory
B) new Keynesian theory
C) real business cycle theory
D) institutionalist theory