The notion that the appropriate monetary policy at all times is one that requires the Federal Reserve to expand the money supply at a steady rate of 4 to 5 percent per year is an example of
A) the rules of the game.
B) the rule of reason.
C) a rule of thumb.
D) a rigid policy rule.
E) a feedback policy rule.

Question

Quizplus · Accepted Answer

This is an example of a rigid policy rule, as it prescribes a specific target for the rate of money supply expansion regardless of economic conditions or circumstances.

The Notion That the Appropriate Monetary Policy at All Times