The central bank often deviates from simple policy rules because:
A) the rules are always wrong.
B) they have new and more detailed information.
C) they are ordered to by the president.
D) they have no discretion.
E) the federal government is more interested in unemployment.

Question

Quizplus · Accepted Answer

The central bank often deviates from simple policy rules because they have new and more detailed information. Simple policy rules do not always take into account all the complex factors that the central bank needs to consider in setting monetary policy, and the central bank may have access to new data that may require a deviation from a simple rule.

The Central Bank Often Deviates from Simple Policy Rules Because