Question: Explain clearly In the IS-MP model, when the Fed increases the real interest rate Select one: a. the MP curve shifts up resulting in a

Explain clearly

In the IS-MP model, when the Fed increases the real interest rate Select one:

a. the MP curve shifts up resulting in a decline in the output gap.

b. the MP curve shifts up resulting in an increase in the output gap.

c. the MP curve shifts down resulting in an increase in the output gap.

d. the MP curve shifts down resulting in a decline in the output gap.

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