Which of the Following Explains the Time-Inconsistency of Policy Explained

Multiple Choice

Which of the following explains the time-inconsistency of policy explained by Kydland and Prescott?

A) A contractionary monetary policy will lead to higher unemployment in the short-run but not the long-run.
B) An expansionary monetary policy will lead to higher unemployment in the short-run but not the long-run.
C) Expected inflation is higher than otherwise if the public believes that policymakers will be tempted to raise inflation to reduce unemployment.
D) Expected inflation is lower than otherwise if the public believes that policymakers will be tempted to lower inflation to reduce unemployment.