Answer to Question 1
Answer: FALSE
Explanation: A procedure is a series of steps that must be followed to arrive at a decision, each of the steps being clear and straightforward. A policy provides guidelines rather than steps for the decision maker to follow. Each guideline must be interpreted and evaluated for the situation at hand. Therefore, a policy requires much more judgment and interpretation than a procedure.
Answer to Question 2
Answer: FALSE
Explanation: A highway speed limit is an example of a rule, not a policy. Policies require the decision maker to exercise judgment and interpretation. Following a speed limit, on the other hand, involves no interpretation. The driver simply must not exceed the posted speed.
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The fiscal policy to counter an inflationary gap is a(n)