A decision to increase the parameter λ in the MP curve is an example of ________.
A)autonomous easing
B)leftward movement along the curve
C)rightward movement along the curve
D)endogenous response
E)autonomous tightening

Question

Quizplus · Accepted Answer

Increasing the parameter λ in the MP (Monetary Policy) curve is an example of autonomous tightening. This is because a higher λ implies a more aggressive response to inflation or output gap, leading to tighter monetary policy conditions.

A Decision to Increase the Parameter λ in the MP