A Credible Nominal Anchor

question 28

Multiple Choice

A credible nominal anchor

• A)can help overcome the time-inconsistency problem by providing an expected constraint on discretionary policy.
• B)can help to anchor inflation expectations,which leads to smaller fluctuations in inflation.
• C)is required for a policy rule.
• D)all of the above.
• E)both A and B.

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Definitions:

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Theory of emotion in which a stimulus must be interpreted (appraised) by a person in order to result in a physical response and an emotional reaction.

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