Discretionary monetary policy is monetary policy that is based on
A) the judgment of Congress about the current needs of the economy.
B) a rule that allows no discretion in how policymakers respond to the state of the economy.
C) the ups and downs of the stock market.
D) the judgment of the monetary policymakers about the current needs of the economy.
E) rules that depend upon the state of the economy.

Question

Quizplus · Accepted Answer

Discretionary monetary policy is based on the judgment of the monetary policymakers about the current needs of the economy. It allows policymakers to use their discretion in making decisions about interest rates, money supply, and other monetary policy tools based on their analysis of economic conditions. It is often contrasted with rules-based monetary policy, which relies on predetermined rules rather than discretion.

Discretionary Monetary Policy Is Monetary Policy That Is Based on