What Does the Time Inconsistency of Policy Imply

question 90

Multiple Choice

What does the time inconsistency of policy imply?

• A)It implies that what policymakers say they will do is generally what they will do, but people don't believe them because of current policy.
• B)It implies that when people expect that inflation will be low, it is harder for the Bank of Canada to increase output by increasing the money supply.
• C)It implies that people will believe the Bank of Canada policy will be more inflationary than the Bank of Canada claims.
• D)It implies that the Bank of Canada coordinates its actions with elected officials.

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Definitions:

Field of Organizational Behaviour

An interdisciplinary field that studies how individuals, groups, and structure affect and are affected by behavior within organizations, aiming to improve organizational effectiveness and employee well-being.

Prediction

The act of forecasting or projecting the future outcome or trends based on current or past data, analysis, or trends.

Analysis

The process of breaking a complex topic or substance into smaller parts to gain a better understanding of it.

Explanation

The act of making something clear or understandable, providing reasons, context, or details.