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.

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Definitions:

Alone

Being separate or isolated.

Task

A piece of work or duty to be completed, often with a specific objective.

Compounded Annually

Refers to the process of calculating and adding interest to the principal balance of an investment or loan once per year.

Investment

Allocation of resources, usually money, in the expectation of generating an income or profit.