An instrument rule is based on of the economy while a targeting rule is based on
Of the economy.

Question

Quizplus · Accepted Answer

An instrument rule, such as adjusting interest rates, is based on the current state of the economy. In contrast, a targeting rule, such as targeting inflation, is based on a forecast of the economy. Therefore, choice A is the best answer as it correctly identifies the difference between these two types of rules.

An Instrument Rule Is Based on of the Economy While