A Monetary Policy Rule

question 246

Multiple Choice

A monetary policy rule:

• A)occurs when the central bank pursues a formula that determines its actions.
• B)brings politics into the monetary policy process.
• C)is the same as discretionary monetary policy.
• D)is likely to be advocated by Keynesians.

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Definitions:

Frictional Unemployment

The short-term unemployment that arises from people moving between jobs, careers, or locations.

Technological Improvement

Enhancements in technology that increase the efficiency of production or the quality of goods and services.

Labor Union

An organization formed by workers to protect their rights and interests, often negotiating wages, work hours, and working conditions with employers.

Structural Unemployment

A form of unemployment caused by shifts in the economy, such as technological changes or global competition, that create a mismatch between the skills workers have and the skills needed by employers.