Which of the following is true in the dynamic AS-AD model? Group of answer choices The dynamic aggregate demand curve is downward sloping because the central bank follows the Taylor principle. An increase in the natural level of output increases the long-run inflation rate. To control inflation, the central bank should increase the nominal interest rate by less than one for one in response to an increase in the inflation rate. The monetary policy rule determines the slope of the dynamic aggregate supply curve.
Which of the following is true in the dynamic AS-AD model? Group of answer choices The dynamic aggregate demand curve is downward sloping because the central bank follows the Taylor principle. An increase in the natural level of output increases the long-run inflation rate. To control inflation, the central bank should increase the nominal interest rate by less than one for one in response to an increase in the inflation rate. The monetary policy rule determines the slope of the dynamic aggregate supply curve.
Chapter27: The Philips Curve And Expetactions Theory
Section27.6: How Different Macroeconomic Theories Attack Inflation
Problem 1YTE
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Which of the following is true in the dynamic AS-AD model?
Group of answer choices
The dynamic aggregate demand curve is downward sloping because the central bank follows the Taylor principle.
An increase in the natural level of output increases the long-run inflation rate.
To control inflation, the central bank should increase the nominal interest rate by less than one for one in response to an increase in the inflation rate.
The monetary policy rule determines the slope of the dynamic aggregate supply curve .
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