Interest Rate Interest Rate Inflation Policy Rule A Policy Rule B 0 0.5 1.5 2 4 5 4 7.5 8.5 6 11 12 8 00 14.5 15.5 If the central bank changes its monetary policy rule from A to B as shown in Exhibit 24-3, ○ the monetary policy rule line will shift to the right. O there will be no change in the real rate of interest. O the real rate of interest will decline. there has been an increase in the target inflation rate. the monetary policy rule line will shift to the left.

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