If policymakers are not aggressive about keeping inflation close to the target rate, the slope of the monetary policy reaction curve would be:
A) steep.
B) relatively flat.
C) horizontal.
D) negative.

Question

Quizplus · Accepted Answer

If policymakers are not aggressive about keeping inflation close to the target rate, the slope of the monetary policy reaction curve would be relatively flat. This is because they are not actively adjusting policies and responding to changes in inflation, leading to a weaker relationship between the two variables.

If Policymakers Are Not Aggressive About Keeping Inflation Close to the Target