Arguments for Adopting a Policy Rule Include

question 6

Multiple Choice

Arguments for adopting a policy rule include

• A)discretion avoids the straightjacket that would lock in the wrong policy if the model that was used to derive the policy rule proved to be incorrect.
• B)discretion enables policy makers to change policy settings when an economy undergoes structural changes.
• C)discretionary policies pursue overly expansionary monetary policies to boost employment in the short run but generate higher inflation in the long run.
• D)all of the above.

---

Definitions:

Financial Risk Exposure

represents the potential for financial loss that a company faces due to its financial decisions and market conditions, including changes in interest rates, currency exchange rates, and credit risks.

Citrus Grower

A citrus grower is an individual or company engaged in the cultivation and production of citrus fruits, such as oranges, lemons, limes, and grapefruits.

Clothing Manufacturer

A business specialized in producing clothing items, from the design phase through to the final production.

Cotton Farmer

An individual or business engaged in the cultivation of cotton plants for fiber production.