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:

Normal Distribution

A probability distribution that is symmetrically centered around the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Vertical Blinds

Window coverings consisting of vertical slats that can be adjusted to control light and visibility.

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect in a particular situation, serving as the default assumption to be tested against an alternative hypothesis.

Alternative Hypothesis

A statistical hypothesis that specifies a population parameter's value is different from the value stated in the null hypothesis.