Imposing an active monetary growth rule that links monetary growth to the unemployment rate implies that
A)the economy can be fine tuned
B) flexibility in responding to economic disturbances is totally lost
C) political cycles can more easily occur
D)the administration can more easily influence decisions made by the FOMC
E)none of the above

Question

Quizplus · Accepted Answer

Linking monetary growth to the unemployment rate does not necessarily mean the economy can be fine-tuned, nor does it imply a total loss of flexibility, an increase in political cycles, or that the administration can more easily influence FOMC decisions. These outcomes depend on how the rule is implemented and other factors in the economic and political environment.

Imposing an Active Monetary Growth Rule That Links Monetary Growth