A Benefit to Policymakers of Following Rules Rather Than Discretion

question 17

Multiple Choice

A benefit to policymakers of following rules rather than discretion is

• A)they could employ a larger staff of economists.
• B)they will contribute to the formation of an expectations trap.
• C)they would not be able to pursue time-inconsistent policies.
• D)they would gain flexibility in case the economy's structure changed.

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Definitions:

Conceptual Skills

The ability to understand complex ideas and concepts, and to creatively find solutions to problems with a high level of abstraction and foresight.

Strategic Thinking

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Problem Solving

Problem solving involves identifying, analyzing, and resolving issues through logical thinking and applying effective solutions.

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