Which of the Following Would Be an Example of Running

Multiple Choice

Which of the following would be an example of running monetary policy by rules?

A) A 5 percent increase in money supply automatically leads to a 2 percent increase in real GDP.
B) An increase in money supply automatically leads to an increase in inflation.
C) The Fed will increase money growth to different levels, depending on the severity of the recession.
D) A 1 percent drop in real GDP will automatically elicit a 2 percent increase in money supply.