The Time Inconsistency of Policy Implies That

question 68

Multiple Choice

The time inconsistency of policy implies that

• A)what policymakers say they will do is generally what they will do, but people don't believe them because of current policy.
• B)when people expect that inflation will be low, it is harder for the Fed to increase output by increasing the money supply.
• C)people will believe Fed policy will be more inflationary than the Fed claims.
• D)None of the above is correct.

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Definitions:

Transmitting Neurons

Neurons that send signals from the brain to various parts of the body, facilitating communication within the nervous system.

Images

In a psychological context, images can refer to mental representations of sensory experiences, often visual, that are not currently being perceived but can be recalled or imagined.

Fraction Of A Second

A very short period of time, indicating something that happens extremely quickly.

Life Stories

Narratives that individuals construct about their lives, often reflecting their personal identity, experiences, and values.