The position of the monetary policy reaction function depends on
A) the natural rate of unemployment.
B) the natural rate of inflation.
C) the natural level of the interest rate.
D) the central bank's target value for inflation.

Question

Quizplus · Accepted Answer

The monetary policy reaction function is influenced by the central bank's target value for inflation, as it guides the bank's decisions on interest rates to achieve its inflation goals.

The Position of the Monetary Policy Reaction Function Depends on