If the Fed bases its monetary policy on judgments of its policymakers about the current needs of the economy, it is following a
A) a monetary base instrument rule.
B) discretionary policy.
C) an inflation targeting rule.
D) wait-and-see policy.
E) a money targeting rule.

Question

Quizplus · Accepted Answer

The Fed basing its monetary policy on judgments of its policymakers about the current needs of the economy is an example of discretionary policy. This means that the policymakers use their own judgment and discretion to determine what actions to take in response to economic conditions.

If the Fed Bases Its Monetary Policy on Judgments of Its