Multiple Choice
A time-inconsistency problem in macroeconomic policy can occur when the policymaker:
A) is made to follow a strict and an inflexible rule.
B) has discretion in the short run but follows a rule in the long run.
C) has discretion to act as it seems best in each situation, based on his or her own knowledge and experience.
D) has no discretion.
Correct Answer:
Verified
Correct Answer:
Verified
Q13: The Phillips curve describing an economy
Q14: Is the independence of the central bank
Q15: Automatic stabilizers:<br>A) require congressional action before each
Q16: The concerns of economists who favor passive
Q17: A policy rule:<br>A) must specify money growth
Q19: Computer models of the economy:<br>A) usually consist
Q20: The time between when government spending increases
Q21: Explain why each of the following statements
Q22: Passive economic policy seeks to:<br>A) offset fluctuations
Q23: Policymakers may be better able to achieve