Advocates of fixed policy rules believe that Discretionary policies can improve macro outcomes.Appropriate macro policy would include constant fixed-rate increases in the money supply and balanced federal budgets.Due to the problems implementing fiscal policy, the economy would be better off if the Fed controlled discretionary fiscal policy.All of the answers are correct.

Fixed policy rule refers to the situation when government officials beleives in some special set of rules to make economic policies in the economy. According to the people who beleives in fixed policy rules, constant-fixed rate of an increase in money supply and fed's balanced budget by using discretionary policies as it helps to deal with economic problems. In short, Monetary policies are more effective than fiscal policy as discretionary policy. Hence, the correct option is: All of the answers are correct.

Answered: Advocates of fixed policy rules believe…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Advocates of fixed policy rules believe that

Discretionary policies can improve macro outcomes.
Appropriate macro policy would include constant fixed-rate increases in the money supply and balanced federal budgets.
Due to the problems implementing fiscal policy, the economy would be better off if the Fed controlled discretionary fiscal policy.
All of the answers are correct.

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