Exhibit 24-4 -If the Central Bank Changes Its Monetary Policy Rule from Policy

question 19

Multiple Choice

Exhibit 24-4
-If the central bank changes its monetary policy rule from A to B as shown in Exhibit 24-4,

• A)the AD curve will shift to the right.
• B)there will be a downward movement along the AD curve.
• C)the AD curve will shift to the left.
• D)there will be an upward movement along the AD curve.
• E)there will be no change since the real rate of interest does not change.

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Definitions:

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