The Primary Criticism by Keynesians of the Credibility Argument for Rules

question 105

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 presidential and congressional influence over monetary policy could ultimately be harmful to the economy.

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Definitions:

Contract

An agreement between two or more entities that holds legal validity and can be enforced in a court of law.

Restrictive Covenant

A clause in a deed or lease that limits how the property can be used, often to maintain the value or character of the land.

Rental Revenue

Income derived from leasing properties or assets to tenants, including residential, commercial, or industrial spaces.

Lease

A legal agreement wherein one party grants the other the right to use an asset (e.g., property, vehicle) for a specified period in exchange for payment.