Explain the advantagesdisadvantages of using either rules or

Explain the advantages/disadvantages of using either “rules” or “discretion” when making choices regarding monetary policy.

Solution

The advatages of using rules or discreation when making choices regarding monetary policy is that it requires strict allocation of funds with proper terms and conditions. The disadvantage of using rules or discreation when making choices regarding monetary policy is that it would create excess burden on the person taking finanical help because it is going to be valid for a limited period.