Policy Is Conducted by Discretion If Policymakers

question 6

Multiple Choice

Policy is conducted by discretion if policymakers:

• A) size up the economy and choose whatever policy seems appropriate at the time.
• B) announce in advance how policy will respond to various situations and commit themselves to following through on this announcement.
• C) maintain a constant growth rate of the money supply without making their decision public.
• D) announce and achieve a balanced government budget.
• E) announce and maintain a constant interest rate.

---

Definitions:

Incremental Value

The additional value generated by undertaking a new project or decision, calculated as the difference between the value with and without the project.