The Time-Inconsistency Problem Is Likely to Arise in Cadmia If

question 132

Multiple Choice

The time-inconsistency problem is likely to arise in Cadmia if _____.

• A)attempts are made to coordinate monetary policy with fiscal policy
• B)there is a lag between the announcement of a monetary policy and its implementation
• C)policy makers initially aim to keep the price level stable but do not follow through as promised
• D)policy makers do not allow enough time for a new policy to take effect
• E)there is a deep conflict among monetary policy makers

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