A Central Bank is said to have a more hawkish stance when it reacts more aggressively againstdeviations of inflation from target.Recall that the AD curve is given by: Ýį = ā – bm(T; – ñ), and the AS curve is given byTt = Tt-1 + ū¥Ýt +ōKnowing this, saying that the Central Bank became more hawkish is equivalent to say:Inflation,ASADOutput, ỸO That ā decreased, thus moving down the AD curve.O That b decreased, thus making the AD curve steeper.That ū increased, thus making the AS curve steeper.O That ñ decreased, thus flattening the AD curve.O That the equilibrium inflation moved to below ĩñ.That b decreased, thus making the AD curve flatter.O That ā increased, thus moving up the AD curve.O That ñ increased, thus flattening the AD curve.

A central bank becomes more hawkish when it supports the increase in interest rate in order to fight…

A Central Bank is said to have a more hawkish stance when it reacts more aggressively against deviations of inflation from target. Recall that the AD curve is given by: Ý; = ā – bī(T: – 7), and the AS curve is given by Tt = Tt-1 + ūÝ¿ +õ Knowing this, saying that the Central Bank became more hawkish is equivalent to say: Inflation, 7 AS

A Central Bank is said to have a more hawkish stance when it reacts more aggressively against deviations of inflation from target. Recall that the AD curve is given by: Ý; = ā – bī(T: – 7), and the AS curve is given by Tt = Tt-1 + ūÝ¿ +õ Knowing this, saying that the Central Bank became more hawkish is equivalent to say: Inflation, 7 AS

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter27: Issues In Macroeconomic Theory And Policy

Section: Chapter Questions

Problem 6P

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