The ________ problem of discretionary policy arises because economic behavior is influenced by what firms and people expect the monetary authorities to do in the future
A) moral hazard
B) time-inconsistency
C) nominal-anchor
D) rational-expectation
B
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How do entry barriers hamper economic prosperity?
What will be an ideal response?
It is reasonable to assume that in a developed economy technological shocks occur ________ across industries, which ________ the RBC theory of business cycles
A) randomly, opposes B) randomly, supports C) uniformly, opposes D) uniformly, supports
A linear demand curve has a:
A. slope which is the same as the elasticity. B. constant slope, but changing elasticity. C. changing slope, but constant elasticity. D. constant slope and a constant elasticity, but they need not be equal.
Consider a consumer who spends all income on only two goods: pizza and soda. An extra slice of pizza would give the consumer 60 extra utils, while an extra can of soda would give the consumer 20 extra utils. Pizza costs $3 per slice, and soda costs $1 per can. In this situation, the consumer:
a. is buying too much pizza and not enough soda. b. should purchase more pizza and less soda. c. has maximized his or her total utility. d. needs to equate the marginal utilities for pizza and soda.