Multiple Choice
The position of the monetary policy reaction function depends on
A) the natural rate of unemployment.
B) the value of the inflation rate when the central bank has set the real interest rate at the "normal" baseline value r0.
C) the value of the unemployment rate when the central bank has set the real interest rate at the "normal" baseline value r0.
D) the value of the total output growth rate when the central bank has set the real interest rate at the "normal" baseline value r0..
Correct Answer:
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