In Which Case Is Time-Inconsistency Most Likely to Occur

Multiple Choice

In which case is time-inconsistency most likely to occur?

A) the legislature approves a new budget with a tax increase to correct an overheating economy
B) the central bank conducts open market operations to raise interest rates
C) the European Central Banks buys dollars to alter the euro's exchange rate
D) a monopolist undertakes inventory investment in anticipation of high seasonal sales of its product
E) a consumer undertakes savings in anticipation of retirement