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If a central bank has a quadratic loss function and cares about the output gap and deviation from its inflation target, then on a graph
If a central bank has a quadratic loss function and cares about the output gap and deviation from its inflation target, then on a graph with output on the horizontal axis and inflation on the vertical axis, the central bank's indifference curves can be represented as
A.
a set of straight lines.
B.
a set of triangles.
C.
a set of concave curves.
D.
a set of ellipses.
E.
a set of convex curves.
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