Monetary rules work best when:
A) the Fed loses control of the money supply.
B) interest rates are high.
C) money velocity is stable.
D) inflation expectations are high.

Question

Quizplus · Accepted Answer

Monetary rules work best when money velocity is stable. This means that the rate at which money is circulating in the economy is predictable and consistent. When money velocity is unstable, it can lead to unpredictable outcomes and make it difficult for policymakers to control the money supply. Stable money velocity allows for more effective implementation of monetary policy, which can help maintain price stability and promote economic growth.

Monetary Rules Work Best When