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One of the Important Reasons Why Many Economists Prefer Monetary

Question 3

Multiple Choice

One of the important reasons why many economists prefer monetary policy that uses discretion instead of rules is that it:


A) prevents the Federal Reserve from using excessive expansionary policy to pump up the economy.
B) does a better job at keeping inflation at the long-run target.
C) keeps the money supply steady over the long run.
D) allows monetary policy to be used more aggressively when major economic shocks occur.

Correct Answer:

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