The ________ Problem of Discretionary Policy Arises Because Economic Behavior

question 26

Multiple Choice

The ________ problem of discretionary policy arises because economic behavior is influenced by what firms and people expect the monetary authorities to do in the future.

• A)moral hazard
• B)time-inconsistency
• C)nominal-anchor
• D)rational-expectation

---

Definitions:

Lurking Variable

A hidden variable that is not measured in a study but can influence the relationship between the studied variables.

Regression Analysis

A statistical method for examining the relationship and predicting the outcome of one variable on the basis of others.

Church Attendance

The act of going to church services, often measured as an indicator of religious activity or commitment.

Jail Population

The total number of individuals incarcerated in jail facilities at any given time, often analyzed for demographics, trends, and policy impacts.