Why Should Monetary Policy Be Made by Rule Rather Than

question 75

Multiple Choice

Why should monetary policy be made by rule rather than discretion?

• A)because there is a clear consensus among economists about what a good monetary policy rule would be
• B)because rules would eliminate the political business cycle
• C)because rules respond to any random shocks in the economy
• D)because rules create time inconsistency

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Definitions:

Customer Satisfaction Rating

A measure, often expressed as a percentage or scale, of the degree to which customers are happy with a product or service.

Financial Outcomes

The monetary results of an organization's operations and activities, reflecting its financial health and profitability.

Traditional Accounting System

An accounting system primarily focused on the preparation of financial statements and compliance with accounting standards, often with less emphasis on detailed cost tracking or management decision support.

Current Performance

The present level of achievement or results shown by an individual, team, or entity, often assessed in the context of goals or benchmarks.