To Solve the "Time Inconsistency" Problem in Macro Policy,a Nation

question 52

Multiple Choice

To solve the "time inconsistency" problem in macro policy,a nation may well have to

• A)restrict itself in the present from taking certain policy moves in the future.
• B)lift all restrictions on future policy moves.
• C)present policy moves to the public, for example, in a referendum.
• D)use the courts to settle policy disputes.
• E) make the central bank more responsive to the popular will.

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Definitions:

Pooled Estimator

A method used to estimate a common mean or variance from two or more samples, especially in t-tests involving independent samples with assumed equal but unknown variances.

Confidence Interval

A type of estimate computed from the statistics of observed data, which might contain the true value of the unknown population parameter.

Two-Wheeled Bicycle

A vehicle consisting of two wheels held in a frame one behind the other, propelled by pedals and steered with handlebars attached to the front wheel.

Population Distributions

The distribution of a particular characteristic (e.g., age, height, test scores) across all individuals within a larger group or population.