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A rule that is advocated by the monetarists is the ____ rule.
A) constant money growth rate
B) escalating money growth rate
C) fiscal expansionism
D) interest rate sterlization
Answer: A
Diff: 2 Type: MC Page Ref: 622
Skill: Recall
Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
discretion policy debates
An example of a rule used in non-discretionary monetary policy is ____.
A) the Taylor rule
B) the Taylor principle
C) Keynesian rule
D) interest rate consistency
Answer: A
Diff: 2 Type: MC Page Ref: 622
Skill: Recall
Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
discretion policy debates
One example where a rules based approach would have improved the economy is ____.
A) the Great Depression
B) the financial crisis in 2007
C) the subprime mortgage markets
D) derivatives trading
Answer: A
Diff: 2 Type: MC Page Ref: 622
Skill: Recall
Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
discretion policy debates
The political business cycle can lead to ____.
A) expansionary monetary policy
B) expansionary fiscal policy
C) corruption
D) both A and B
Answer: D
Diff: 2 Type: MC Page Ref: 622
Skill: Recall
Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
discretion policy debates