Question

Can you explain the answer

MP Curve Real Interest Rate, r (percent) Inflation Rate, (percent) 41) 41) Referring to the graph above, a movement from point H to point I might represent 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 42) On the graph above, which pair of points best represents the impacts in the U.S. of the financial crisis and policy response from 2007 through 2008? 42) A) K to G B ) H to I G to J D ) I to H E) K to F 43) On the graph above, which pair of points best represents a scenario in which the nominal interest rate and expected inflation decline equally? 43) A) J to H B) I to H C) G to K D ) I to JE) K to F

Answer 1

41) c) any of the above.

The movement from. Point H to I may be due to mometary policy, increase in inflation amd interest rate etc..

42) c) G to J

43) d) I to J