The MP curve may be used to represent ________.
A) movements of the real interest rate as a direct policy action of the Federal Reserve
B) movements of the real interest rate that are independent of direct Federal Reserve action
C) how the real interest rate is related to the inflation rate
D) all of the above
E) none of the above
Question 2
In the new Keynesian model, expected inflation is a function of ________.
A) expected future output gaps and markup shocks
B) current and past inflation
C) unanticipated aggregate demand shocks
D) expected growth of the money supply
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