Question) Which of the following events would strengthen the argument for the us

Question

Question) Which of the following events would strengthen the argument for the use of discretionary

policy, and which would strengthen the argument for rules?

(a) Structural changes make the economy’s self-correcting mechanism work

more quickly and reliably than before.

(b) New statistical methods are found that improve the accuracy of economic

forecasts.

(c) A Republican Congress is elected when there is a Democratic president.

Congress and the president differ sharply on what should be done about the national economy.

Explanation / Answer

Option a and option B strengthen the argument for rules whereas option C strengthen the rule of discretionary. Rules can be too rigid and  do not easily incorporate the tool of judgement
No one knows what the true model of the economy is and so any policy rule that is based on a specific model will prove to be wrong if the model is wrong

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