One Often-Cited Rationale for a Fixed-Growth-Rate Monetary Policy Is That

question 62

Multiple Choice

One often-cited rationale for a fixed-growth-rate monetary policy is that

• A)it is too expensive to pay a staff to continually make adjustments in policy
• B)although it's possible to determine what's happening in the economy,it's not possible to determine what to do about it
• C)it is not possible to determine with any certainty what's happening in the economy,so it's easy to make a mistake with active policy
• D)we know that the economy is increasing at a fixed rate year after year,so a fixed rate of growth in the money supply is justified
• E)then the Federal Reserve would be superfluous and we could eliminate one large bureaucracy

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Definitions:

Taxes

Mandatory financial charges or levies imposed by a government on individuals or entities to fund public expenditures.

Human Life

The existence of an individual human being, from birth to death, including all experiences and actions.

Voluntary Risks

Risks that individuals knowingly and willingly choose to take, often after considering the potential benefits and dangers.

Cost-Benefit Analysis

A systematic approach to estimating the strengths and weaknesses of alternatives used to determine options that provide the best approach to achieving benefits while preserving savings.