If a Government Managed to Reduce the Time Inconsistency Problem

question 17

Multiple Choice

If a government managed to reduce the time inconsistency problem by mandating that the central bank target inflation at a low rate,then

• A)the long-run Phillips curve would shift right.
• B)the long-run Phillips curve would shift left.
• C)the short-run Phillips curve would shift up.
• D)the short-run Phillips curve would shift down.

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Definitions:

Stinging Cells

Specialized cells found in some animals, such as jellyfish, that contain a stinging structure used for capturing prey or defense.

Pores

Small openings on the surface of the skin or other tissues, often serving as passageways for fluids or gases.

Central Cavity

A hollow space within an organ or structure, often found in sponges and coelenterates, serving various physiological functions.