If the Central Bank Bases Its Monetary Policy on the Judgements

question 32

Multiple Choice

If the central bank bases its monetary policy on the judgements of its policymakers about the current needs of the economy, it is following

• A) a money targeting rule.
• B) a wait-and-see policy.
• C) discretionary policy.
• D) a monetary base instrument rule.
• E) an inflation targeting rule.

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Definitions:

Transience

The state or condition of being temporary or short-lived.

Memory Sin

A term referring to the various kinds of inaccuracies or errors that human memory is prone to, such as transience, absent-mindedness, misattribution, and suggestibility, among others.

Decay

In the context of science, it often refers to the process by which organic substances break down into simpler forms of matter; in physics, it can refer to the decrease in number or function of particles over time.

Commission

A fee paid to an agent or employee for facilitating a sale or service.