The Time-Inconsistency Problem in Discretionary Policymaking About Unemployment and Inflation

question 11

Multiple Choice

The time-inconsistency problem in discretionary policymaking about unemployment and inflation can be effectively avoided when the:

• A) policymaker has and is known to have an extremely strong preference for very low inflation.
• B) policymaker does not care about the rate of inflation and simply sets policy to avoid unemployment.
• C) private agents in the economy are not "rational."
• D) policymaker has more information than do the private agents in the economy.

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Definitions:

Sexual Pleasure

The physical and/or emotional satisfaction derived from sexual activities or thoughts.

Animals

Multicellular, eukaryotic organisms in the kingdom Animalia or Metazoa, characterized by their ability to move voluntarily and consume organic material.

Exhibitionism

A paraphilia characterized by the recurrent urge or behavior to expose one's genitals to an unsuspecting person for sexual pleasure.

Displaying Genitals

The act of exposing one's sexual organs in a public or private setting, which can vary in social acceptability based on context.