Time-Inconsistency in Monetary Policy Is Most Likely to Create

question 7

Multiple Choice

Time-inconsistency in monetary policy is most likely to create

• A) long information lags
• B) long decision lags
• C) long implementation lags
• D) low credibility
• E) low sacrifice ratios

---

Definitions:

Atoms

The smallest constituent unit of ordinary matter that has the properties of a chemical element.

Chemical Reaction

A change in the bonds between the atoms of different chemical elements or compounds.

Crankshaft

The shaft to which the pistons’ connecting rods are attached and through which power is transmitted from the engine to the transmission and ultimately to the drive wheels.

Mechanical Energy

The sum of the kinetic and potential energies in a mechanical system, accounting for the energy due to its motion and position.