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:

Arbitration

A form of alternative dispute resolution where a neutral third party makes a binding decision to resolve a dispute outside of court.

Supreme Court

The highest judicial court in a country or state, typically having the ultimate authority in interpreting laws and the constitution.

Binding Agreement

A legally enforceable contract between two or more parties.

Settlement Agreement

A legally binding contract between parties that resolves a dispute and outlines the terms of the settlement.