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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