What Does the Time Inconsistency of Policy Imply

Multiple Choice

What does the time inconsistency of policy imply?

A) It implies that what policymakers say they will do is generally what they will do, but people don't believe them because of current policy.
B) It implies that when people expect that inflation will be low, it is harder for the Bank of Canada to increase output by increasing the money supply.
C) It implies people always expect more inflation than policymakers claim they are trying to achieve.
D) It implies that the Bank of Canada coordinates its actions with elected officials.