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) There is a clear consensus among economists about what a good monetary policy rule would be.
• B) Rules would eliminate the political business cycle.
• C) Rules respond to any random shock in the economy.
• D) Rules create time inconsistency.

---

Definitions:

Evolutionary Accounts

Explanations that detail how the process of natural selection and genetic variation have led to the development of specific biological traits and behaviors over time.

Violent Crime

Acts of crime that involve force or the threat of force against people.

Modern Warfare

Modern warfare refers to the methods, technology, and tactics used in contemporary military operations, often characterized by the use of advanced technology.

Sexual Response Cycle

A model describing the phases of physiological responses to sexual stimulation, typically including excitement, plateau, orgasm, and resolution phases.