The Temptation to Engage in Dynamic Inconsistency Can Be Minimized

question 23

Multiple Choice

The temptation to engage in dynamic inconsistency can be minimized by

• A)being more concerned with short-run outcomes than long-run outcomes
• B)the desire to achieve credibility
• C)employing policy responses that are right for current disturbances without much concern over long-run objectives
• D)never announcing any proposed policy actions
• E)none of the above

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Definitions:

Impermeable Unit

A geological formation or material that does not allow fluids to pass through it.

Surface Water

Water that occurs in streams, rivers, lakes, oceans, and other settings on Earth’s surface.

Groundwater

Moisture trapped below the ground in the soil or within fissures and cavities of rocks.

Cross Section

A diagram or slice that shows the internal structure of a particular object or area, made by cutting or visualizing a cut through the object.