The ________ Problem of Discretionary Policy Arises Because Economic Behavior

question 26

Multiple Choice

The ________ problem of discretionary policy arises because economic behavior is influenced by what firms and people expect the monetary authorities to do in the future.

• A)moral hazard
• B)time-inconsistency
• C)nominal-anchor
• D)rational-expectation

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Definitions:

Managers' Performance

Refers to the assessment and evaluation of the effectiveness and efficiency with which managers achieve business objectives and goals.

Cost Accounting System

A system of accounting for recording, classifying, allocating, and reporting costs associated with the production of goods and services.

Managerial Accounting System

A managerial accounting system focuses on providing financial and non-financial information to an organization's internal managers for decision-making purposes.

Financial Accounting System

A financial accounting system is a structured process of recording, summarizing, and reporting the myriad of transactions resulting from business operations over a period of time.