The Time-Inconsistency Problem Is Likely to Arise in Cadmia If

Multiple Choice

The time-inconsistency problem is likely to arise in Cadmia if _____.

A) attempts are made to coordinate monetary policy with fiscal policy
B) there is a lag between the announcement of a monetary policy and its implementation
C) policy makers initially aim to keep the price level stable but do not follow through as promised
D) policy makers do not allow enough time for a new policy to take effect
E) there is a deep conflict among monetary policy makers