Most economists favour discretionary monetary policy because the velocity of money has been very stable since the 1980s.

Question

Quizplus · Accepted Answer

The statement is incorrect. Most economists favour rules-based or predictable monetary policy as it provides greater certainty to the market and reduces the risk of policy mistakes. The velocity of money, which measures the rate at which money changes hands in transactions in the economy, has not been very stable since the 1980s. It has varied significantly over time, particularly during periods of economic volatility.

Most Economists Favour Discretionary Monetary Policy Because the Velocity of Money