The Time Inconsistency of Policy Implies That

question 5

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)what policymakers say they will do is usually not what they do,but people believe them anyway.

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Definitions:

Chunking

A memory technique that involves grouping pieces of information together into larger, more manageable units.

Meaningful Units

Smallest segments of language that carry semantic meaning, such as words or morphemes.

Short-term Memory

Holding a minimal amount of details in an alert, easily retrievable condition in the memory for a short time span.

Chunking

A process of breaking down information into smaller, manageable units or chunks to enhance memory and learning capabilities.