Which of the Following Gives the Fed a Credibility Problem

question 65

Multiple Choice

Which of the following gives the Fed a credibility problem because the Fed may change its planned policies in light of new economic developments?

• A)Adaptive expectations
• B)Time inconsistency
• C)Wage expectations
• D)Disinflation
• E)Rational expectations

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Definitions:

Long-Term Memory

The phase of the memory system capable of storing information for prolonged periods, often throughout a person's life.

Unlimited Capacity

A hypothetical concept suggesting that there's no upper limit to the amount of information the human brain can store.

Decades

Periods of ten years, often used to mark significant time intervals in history, research, and life events.

Episodic Memory

The type of long-term memory that involves the recollection of specific events, situations, and experiences, including the context and emotions associated with them.