If the Federal Reserve follows a monetary rule, it will not use discretionary monetary policy to counteract fluctuations in the level of business activity.

Name: If the Federal Reserve follows a monetary rule, it will not use discretionary monetary policy to counteract fluctuations in the level of business activity.
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Question

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A monetary rule implies a set guideline for monetary policy, reducing the use of discretionary actions to stabilize business activity.

If the Federal Reserve Follows a Monetary Rule, It Will