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or each of the following policies indicate whether the policy is: 1. A monetary or a fiscal policy. 2. An active or a passive policy.
or each of the following policies indicate whether the policy is: 1. A monetary or a fiscal policy. 2. An active or a passive policy. 3. A policy by rules or with discretion. (4 total points, 1 point each) A. The central bank follows a policy of allowing the money supply to grow at a constant 4% per year. B. A government follows a policy of keeping government spending over a calendar year equal to government revenue over the calendar year. C. The central bank uses judgment to adjust the growth of the money supply based on expectations of what will happen to output and inflation over the next five years. D. The central bank follows a policy of adjusting the money supply according to a formula based on deviations of unemployment from the natural rate of unemploymen
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