A Policy Is Time Consistent When

question 103

Multiple Choice

A policy is time consistent when:

• A) policymakers have incentives to adhere to a policy decision made today, in the future.
• B) policymakers have incentives to make policy decisions in a time-sensitive fashion.
• C) policymakers consider the future when making current policies.
• D) the timing of a policy is irrelevant.

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Definitions:

S&P Category

A classification system used by Standard & Poor's to categorize and evaluate stocks or other securities based on their sector or characteristics.

CCC/C

A credit rating symbol used by rating agencies to denote a high risk of default; regarding bonds or loans, it signifies very poor credit quality.

Default Rate

The percentage of borrowers who fail to make payments on their debts or loans as agreed, leading to a default status.

Moody's "Aaa"

The highest credit rating given by Moody's Investors Service, denoting the lowest risk of default for bonds and other fixed-income securities.