Which one of the following is an example of passive policymaking?
A) introducing expansionary monetary policy to combat a recession
B) introducing expansionary monetary policy to combat inflation
C) introducing expansionary fiscal policy to combat a recession
D) following a predetermined monetary policy rule

Question

Quizplus · Accepted Answer

Following a predetermined monetary policy rule is an example of passive policymaking because it involves adhering to a set of rules or guidelines without actively making changes based on current economic conditions. This approach is often favored by policymakers who believe that market forces should be allowed to dictate economic outcomes, rather than government intervention. Options A, B, and C all involve active policy decisions aimed at addressing specific economic issues, which would not be considered passive policymaking.

Which One of the Following Is an Example of Passive