Which of the Following Would Eliminate the Time Inconsistency Problem

question 165

Multiple Choice

Which of the following would eliminate the time inconsistency problem?

• A)Each of the following would eliminate the time inconsistency problem.
• B)When lags associated with monetary and fiscal policy are extremely short.
• C)When discretionary macro policy is replaced with fixed policy rules which are well publicized.
• D)When expectations about the economy adjust very slowly.
• E)None of the above.

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Fixations

An obsessive interest or feeling about someone or something, potentially leading to patterns of unhealthy or stalled development.

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Rapid, ballistic movements of the eyes that abruptly change the point of fixation.