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Line 1: ~~{{Orphan\|date=February 2009}}~~ ''' The Monetary Policy Reaction Function (MPRF)''' is the upward-sloping relationship between the [[inflation rate]] and the [[unemployment rate]]. When the [[inflation rate]] rises, a [[central bank]] wishing to fight [[inflation]] will raise [[interest rates]] to reduce output and thus increase the [[unemployment rate]]. The MPRF is a function of the''[[Taylor Rule]]'', the ''[[IS curve]]'', and ''[[Okun's Law]]''

Monetary policy reaction function: Difference between revisions