A law that requires the money supply to grow by a fixed percentage each year would eliminate
a. the time inconsistency problem, but not political business cycles.
b. the political business cycle, but not the time inconsistency problem.
c. both the time inconsistency problem and political business cycles.
d. neither the time inconsistency problem nor political business cycles.
Answer: c. both the time inconsistency problem and political business cycles.
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