Multiple Choice
When the central bank pursues expansionary monetary policy and all other economic agents build this into their decision making, ________ rise(s) with no economic benefit; this is called the ________ problem.
A) output; policy lag
B) unemployment; time inconsistency
C) expectations; adaptive expectations
D) inflation; time inconsistency
E) inflation; discretionary
Correct Answer:
Verified
Correct Answer:
Verified
Q74: If policymakers suffer from time inconsistency, they
Q75: In the presence of rational expectations, the
Q76: Central banks always use monetary rules to
Q77: The simple monetary policy rule discussed in
Q78: If the current rate of inflation is
Q80: Refer to the following figure (an aggregate
Q81: In the short-run model, the steady state
Q82: Refer to the following figure when answering
Q83: When we raise the federal funds rate
Q84: The reputations of _, _, and _