Question: Given the following IS equation: y - y = -ar rs) Assume a>1. Choose the appropriate option: O A. The central bank reacts less to

Given the following IS equation: y - y = -ar rs) Assume a>1. Choose the appropriate option: O A. The central bank reacts less to deviations in output and inflation relative to when a=1. B. The central bank reacts more to deviations in output and inflation relative to when a=1. C. The central bank reaction to deviations in output and inflation is the same relative to when a=1. D. The central bank reacts more to deviations in output but less to deviations in inflation relative to when a=1. O E. The central bank reacts less to deviations in output but more to deviations in inflation shocks relative to when a=1. Given the following IS equation: y - y = -ar rs) Assume a>1. Choose the appropriate option: O A. The central bank reacts less to deviations in output and inflation relative to when a=1. B. The central bank reacts more to deviations in output and inflation relative to when a=1. C. The central bank reaction to deviations in output and inflation is the same relative to when a=1. D. The central bank reacts more to deviations in output but less to deviations in inflation relative to when a=1. O E. The central bank reacts less to deviations in output but more to deviations in inflation shocks relative to when a=1
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