An advantage of discretionary policy might be that ________.
A)it has been shown to be more efficient than rules
B)it is more flexible than rules
C)it requires a binding plan in advance to deal with economic problems
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

A disadvantage of using strict rules-based policies is that they may not be flexible enough to deal with changing economic conditions. A discretionary policy allows policymakers to adjust their responses to changing circumstances, which can be an advantage. However, discretionary policy can also lead to uncertainty and inconsistency in decision-making, which is a potential drawback. Option A is incorrect because there is no clear evidence that discretionary policy is always more efficient than rules-based policy. Option C is also incorrect because discretionary policy does not require a binding plan in advance, but rather relies on the judgment of policymakers in responding to economic conditions.

An Advantage of Discretionary Policy Might Be That ________