Which of the Following Gives the Fed a Credibility Problem

question 177

Multiple Choice

Which of the following gives the Fed a credibility problem?

• A)Ricardian equivalence
• B)Sticky prices
• C)Rational expectations
• D)Disinflation
• E)Time inconsistency

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Definitions:

Separation of Powers

A fundamental principle in constitutional law where the government is divided into distinct branches (legislative, executive, judicial), each with its own powers and responsibilities to prevent abuse of power.

Government

The system or group of people governing an organized community, often a state, including the institutions and officials in charge of policy making and administration.

Judicial Review

The power of the courts to assess the constitutionality of legislative acts or executive actions.

Commerce Power

Refers to the authority granted to Congress to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.