The Primary Criticism by Keynesians of the Credibility Argument for Rules

question 29

Multiple Choice

The primary criticism by Keynesians of the credibility argument for rules is that

• A)reputations are a less costly method of gaining credibility.
• B)reputations are a less costly method of maintaining credibility.
• C)the cost of losing flexibility over policy choices may exceed the cost of gaining credibility.
• D)rules that reduce government influence over monetary policy could ultimately be harmful to the economy.

---

Definitions:

Corporation

A legal entity recognized by law as separate from its owners, with its own rights, responsibilities, and liabilities.

Legal Entities

Organizations or structures that have legal rights and obligations, including the capacity to enter into contracts and sue or be sued.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thus having a partial ownership in the company.

Shareholders

Individuals or entities that own shares in a corporation, granting them certain rights and potential financial benefits from the company's performance.