A shift of the MP curve ________.
A)implies an automatic adjustment of the interest rate
B)implies a direct policy action of the Federal Reserve
C)does not alter the relationship between inflation and the interest rate
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

A shift in the Monetary Policy (MP) curve is a direct result of policy actions taken by the Federal Reserve, such as changing the target federal funds rate or altering reserve requirements, which are deliberate decisions to influence the economy.

A Shift of the MP Curve ________