Problem
1. ‘Tinbergen's rule' says that a government with x policy objectives must have at its disposal at least x independent instruments. Explain the difficulties that confront the use of this rule in practice.
2. Outline the arguments against discretionary macroeconomic policy.
3. Explain how the rational expectations hypothesis has been used (a) to support the adoption of monetary rules and (b) to criticise the feasibility of forecasting.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.