VYITICITO OnlowInS L 13 downward-sloping? O If the central bank observes a high rate of inflation, the monetary policy rule dictates a decrease in the nominal interest rate, which decreases the real interest rate. The low interest rate increases output by reducing investment demand in the economy. O If the central bank observes a low rate of inflation, the monetary policy rule dictates an increase in the nominal interest rate, which increases the real interest rate. The high interest rate reduces output by reducing investment demand in the economy. O If the central bank observes a high rate of inflation, the monetary policy rule dictates an increase in the nominal interest rate, which increases the real interest rate. The high interest rate reduces output by reducing investment demand in the economy. O If the central bank observes a low rate of inflation, the monetary policy rule dictates a decrease in the nominal interest rate, which decreases the real interest rate. The low interest rate reduces output by reducing investment demand in the economy.What changes to our model would make that the Aggregate Demand (AD) curve would become flatter in our AS AD diagrams. () NMone of the options is correct > Firms' pricing decisions are more sensitive to demand conditions. (O The central bank fights inflation less aggressively. (O Firms' demand for investment spending is less sensitive to changes in the real interest rate. () Firms' demand for investment spending depends positively on short-run output. O The ZLB is binding Which of the following is not an automatic stabilizer? O Unemployment benefits. O Medicaid. (O Open market operations. i () Progressive income taxes