Author Question: When the ADcurve is relatively flat, the Fed (Read 77 times)

itsmyluck · **on:** Apr 19, 2019

Question 1

If the Fed has a strong preference for stable prices relative to output, it responds to a price ________ with a ________ increase in the interest rate.

◦ increase; large
◦ increase; small
◦ decrease; large
◦ decrease; small

Question 2

When the
AD curve is relatively flat, the Fed

◦ is only willing to accept small changes in output to keep the price level stable.
◦ is willing to accept large changes in the price level to keep output stable.
◦ is not willing to accept any changes in output to keep the price level stable.
◦ is willing to accept large changes in output to keep the price level stable.

amanda_14 · **Reply #1 on:** Apr 19, 2019

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