A monetary policy rule is when the monetary authority:
A)does not commit to future monetary actions.
B)commits to future monetary actions.
C)often produces a monetary surprise to households.
D)always behaves in unpredictable ways.

Question

Quizplus · Accepted Answer

A monetary policy rule involves the monetary authority committing to future monetary actions, such as setting targets for inflation or unemployment. This provides greater transparency and predictability for households and businesses.

A Monetary Policy Rule Is When the Monetary Authority