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:

Money

A medium of exchange for goods and services, functioning as a measure of value and a unit of account.

Social Loneliness

The feeling of being alone or isolated from a social perspective, typically arising from a lack of meaningful social connections.

Emotional Loneliness

A feeling of isolation or detachment from others, despite possibly being surrounded by people.

Illness Transmission

The process by which diseases spread from one individual to another, through direct or indirect contact, or environmental exposure.