Some People Believe That Monetary Policy Should Be Made by Rule

question 33

Multiple Choice

Some people believe that monetary policy should be made by rule rather than by discretion.One of their beliefs is that

• A)setting a policy rule will limit the abuse of power of policymakers.
• B)policymakers can better influence the political business cycle in their favor when following a policy rule.
• C)a policy rule provides policymakers with the greatest flexibility to manage inflation.
• D)if the Fed was required to follow a low-inflation policy,the economy would face a less favorable short-run trade-off between inflation and unemployment.

---

Definitions:

Muscles

Tissues in the body composed of fibers capable of contracting to effect bodily movement.

Circulation

The process by which blood is pumped by the heart through the vascular system, delivering oxygen and nutrients to and removing waste products from cells.

Acupuncture

A complementary medical practice that entails stimulating certain points on the body, most often with a needle penetrating the skin, to alleviate pain or to help treat various health conditions.

Popular

Well-liked by many people or regarded favorably in the public opinion.