A C Inflation rate, π¹ Inflation Inflation 4.5 4 3.5 3 2.5 2 1 2 3 Select one or more: O Chart A Chart B Chart C Chart D 5 4 7 6 VPC 9 8 PC = n¹ MR 11 Output, Y B flation 4.5 3 U 2.5 2 4 13 15 17 19 12 14 16 18 20 4 10 Time period Figure 14 Policy response to a positive demand shock 3.5 2 3 5 7 9 11 13 15 17 19 6 8 10 12 14 16 18 20 D Inflation rate, n² Time period Figure 14 shows four charts labelled A to D depicting aspects of a positive permanent demand shock. Charts B and C are from the DD209 macrosimulator, while Charts A and D show MR curves. Which two of these charts are consistent with the policy response from a central bank that has a strong inflation aversion? (Choose two answers.) VPC MR PC = π¹ Output, Y
A C Inflation rate, π¹ Inflation Inflation 4.5 4 3.5 3 2.5 2 1 2 3 Select one or more: O Chart A Chart B Chart C Chart D 5 4 7 6 VPC 9 8 PC = n¹ MR 11 Output, Y B flation 4.5 3 U 2.5 2 4 13 15 17 19 12 14 16 18 20 4 10 Time period Figure 14 Policy response to a positive demand shock 3.5 2 3 5 7 9 11 13 15 17 19 6 8 10 12 14 16 18 20 D Inflation rate, n² Time period Figure 14 shows four charts labelled A to D depicting aspects of a positive permanent demand shock. Charts B and C are from the DD209 macrosimulator, while Charts A and D show MR curves. Which two of these charts are consistent with the policy response from a central bank that has a strong inflation aversion? (Choose two answers.) VPC MR PC = π¹ Output, Y
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:A
C
Inflation
rate,
Inflation
Inflation
T
4.5
4
Chart D
3.5
3
2.5
2
1
2
Select one or more:
O Chart A
Chart B
Chart C
3
4
5
6
VPC
7
8
PC = π¹
9
MR
Output, Y
B
Inflation
Inflation
11
10
Time period
Figure 14 Policy response to a positive demand shock
13 15 17
12 14 16 18
19
4.5
20
4
3.5
3
2.5
2
2
3
19
4
5 7 9 11 13 15 17
8 10 12 14 16 18 20
Time period
6
D Inflation
VPC
76
rate,
Figure 14 shows four charts labelled A to D depicting aspects of a positive permanent demand
shock. Charts B and C are from the DD209 macrosimulator, while Charts A and D show MR curves.
Which two of these charts are consistent with the policy response from a central bank that has a strong
inflation aversion? (Choose two answers.)
MR
PC = n¹
Output, Y
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