Once you have identified the point of equilibrium in the IS-MP graph in the Fed model, the horizontal axis will show you the:
A)actual inflation.
B)unexpected inflation.
C)output gap.
D)equilibrium real interest rate.

Question

Quizplus · Accepted Answer

The horizontal axis in the IS-MP model typically represents the output gap, which is the difference between actual output and potential output.

Once You Have Identified the Point of Equilibrium in the IS-MP