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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Definitions:

Episodic Memory

A type of explicit memory that includes a person’s personal experiences.

Explicit Memory

A type of long-term memory involving conscious recollection of factual information, previous experiences, and concepts.

Anterograde Amnesia

The inability to form new memories following a traumatic event or the onset of a specific condition, while memories from before the event remain intact.

Brain Damage

Physical harm to the brain that can result in impaired function.