The Primary Criticism by Keynesians of the Credibility Argument for Rules

question 29

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 government influence over monetary policy could ultimately be harmful to the economy.

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Definitions:

Sound's Wavelength

The distance between two consecutive peaks or troughs in a sound wave, determining the sound's pitch.

Sound's Frequency

The number of vibrations or cycles per second of a sound wave, which determines the pitch of the sound.

High-Frequency

Refers to electromagnetic waves with very short wavelengths and high rates of oscillation or vibration.

Low-Frequency

Describing events or phenomena that occur at relatively low rates or cycles per unit of time, often in the context of sound waves or electronic signals.