An inflation rate above the target rate will result in:
A) A movement up along the monetary policy reaction curve and a movement up the dynamic aggregate demand curve
B) A movement down along the monetary policy reaction curve and a movement down the dynamic aggregate demand curve
C) A movement up along the monetary policy reaction curve and a leftward shift of the dynamic aggregate demand curve
D) A movement up along the monetary policy reaction curve and a rightward shift of the dynamic aggregate demand curve
Correct Answer:
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