Why Should Monetary Policy Be Made by Rule Rather Than

question 75

Multiple Choice

Why should monetary policy be made by rule rather than discretion?

• A) There is a clear consensus among economists about what a good monetary policy rule would be.
• B) Rules would eliminate the political business cycle.
• C) Rules respond to any random shock in the economy.
• D) Rules create time inconsistency.

---

Definitions:

Inventory Planning

The process of determining the optimal quantity and timing of inventory for the purpose of aligning it with sales and production capacity.

Supply Chain Management

Connecting and integrating all parties or members of the distribution system in order to satisfy customers.