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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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