How is constrained discretion different from discretion in monetary policy?
O A. With constrained discretion, policymakers believe that rules should be followed, and judgment should only be used when economic models are incorrect.
O B. Constrained discretion is a less transparent and disciplined type of discretion.
O C. Constrained discretion is a type of discretion that is less flexible with monetary policy
O D. With constrained discretion, policymakers follow a set plan and stick to the plan to achieve desirable long run outcomes.
How are the outcomes ikely to be different?
Under constrained discretion, policymakers are likely to have lose credibility through commitment and transparency. Thus, inflation and inflation expectations are likely to be higher than under puro discretion, while giving up much flexibility to address changes in the real economy
