A proponent of the "fixed rules" approach to monetary policy would agree with which of the following statements?

Question

Quizplus · Accepted Answer

Proponents of the "fixed rules" approach to monetary policy argue that discretionary changes by the Federal Reserve (or any central bank) in the money supply can lead to instability in the economy. They often advocate for fixed rules or guidelines that limit the central bank's ability to intervene actively in the economy, believing that such interventions can exacerbate economic fluctuations rather than smooth them out.

A Proponent of the "Fixed Rules" Approach to Monetary Policy