If the Bank of Canada increases the real interest rate as a response to a decrease in the inflation rate,the ________,which results in a ________.
A) MP curve shifts up; movement down the AD curve
B) MP curve shifts up; movement up the AD curve
C) IS curve shifts up; movement down the AD curve
D) IS curve shifts up; movement up the AD curve

Question

Quizplus · Accepted Answer

The Answer of If the Bank of Canada increases the real interest rate as a response to a decrease in the inflation rate,the ________,which results in a ________.
A) MP curve shifts up; movement down the AD curve
B) MP curve shifts up; movement up the AD curve
C) IS curve shifts up; movement down the AD curve
D) IS curve shifts up; movement up the AD curve

If the Bank of Canada Increases the Real Interest Rate