Which of the following provides support for the use of discretion in economic policy-making?
A)any policy rule that is based on a particular model will prove wrong if that model is wrong
B)the existence of a political business cycle
C)the conclusions of Friedman and Schwartz with respect to monetary and fiscal policy
D)the Watergate scandal

Question

Quizplus · Accepted Answer

Discretion in economic policy-making allows policymakers to adapt to new information and changing circumstances, which is important because a policy rule based on a specific model may be ineffective if the model is incorrect.

Which of the Following Provides Support for the Use of Discretion