10. All of the following are called rules. Which of the following so-called rule
ID: 1111531 • Letter: 1
Question
10. All of the following are called rules. Which of the following so-called rules are actually rules and which are more like discretion?i. Congress passes a law providing automatic cost of living increases to Social Security every year.
ii. Congress follows a rule to vote every few years on how much to increase Social Security payments—votes that usually occur just before an election.
iii. The Federal Reserve follows the famous Taylor rule for setting the Federal Funds rate: Nominal rate = 2% + inflation + 0.5 × (real growth – Solow growth rate).
iv. The Federal Reserve follows a rule of doing whatever seems right at the time. The following sound like real rules: i, ii, and iii. The following sounds like discretion: iv. The following sound like real rules: i and ii. The following sound like discretion: iii and iv. The following sound like real rules: i and iii. The following sound like discretion: ii and iv. The following sounds like real rules: ii. The following sound like discretion: i, iii, and iv. 10. All of the following are called rules. Which of the following so-called rules are actually rules and which are more like discretion?
i. Congress passes a law providing automatic cost of living increases to Social Security every year.
ii. Congress follows a rule to vote every few years on how much to increase Social Security payments—votes that usually occur just before an election.
iii. The Federal Reserve follows the famous Taylor rule for setting the Federal Funds rate: Nominal rate = 2% + inflation + 0.5 × (real growth – Solow growth rate).
iv. The Federal Reserve follows a rule of doing whatever seems right at the time. The following sound like real rules: i, ii, and iii. The following sounds like discretion: iv. The following sound like real rules: i and ii. The following sound like discretion: iii and iv. The following sound like real rules: i and iii. The following sound like discretion: ii and iv. The following sounds like real rules: ii. The following sound like discretion: i, iii, and iv.
Explanation / Answer
Answer.) The following sound like real rules: i and iii. The following sound like discretion: ii and iv.
Choices ii and iv sound like “discretion.” In each of these cases, the final decision is just a matter of somebody’s judgment; there’s no precommitment. The other examples are rules that commit somebody to a genuine course of action.
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