If the Fed Bases Its Monetary Policy on Judgments of Its

question 31

Multiple Choice

If the Fed bases its monetary policy on judgments of its policymakers about the current needs of the economy, it is following a

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

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Definitions:

Speed Up Payments

Actions or policies implemented to reduce the time it takes to receive payments from customers, thereby improving cash flow.

Lockboxes

A service provided by banks to process payments more quickly by having checks sent to a special post office box instead of the company's address.

Customer Payments

The payments made by customers for products or services received from a company.