When the Central Bank Chooses a Policy at One Date

question 43

Multiple Choice

When the central bank chooses a policy at one date, which leads people to make decisions based on that policy, which then causes the central bank to choose a different policy at a later date, then there is said to be

• A)irrational expectations.
• B)time inconsistency.
• C)a liquidity trap.
• D)an expectations trap.

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Definitions:

Sterile Technique

A set of practices used to maintain sterility in medical procedures to prevent contamination and infection.

Chronic Wound

A wound that fails to heal in an orderly and timely manner, usually remaining open for an extended period and not responding to typical treatment.

Suture Removal

The act of removing stitches from a wound after it has adequately healed.

Staple Removal

The process of taking out surgical staples from a wound after it has sufficiently healed.