In the context of monetary policy, which of the following might be a passive rule?
A) promoting unemployment insurance
B) implementing a progressive income tax
C) implementing a regressive income tax
D) implementing transfer payments
E) maintaining interest rates at some predetermined level

Question

Quizplus · Accepted Answer

Maintaining interest rates at some predetermined level is considered a passive rule as monetary policy decisions are made based on pre-set rules rather than discretionary action. Choices A, B, C, and D are all related to fiscal policy rather than monetary policy.

In the Context of Monetary Policy, Which of the Following