"Time inconsistency" refers to the:
A. tendency for policies with high short-run benefits to have high long-run costs.
B. fallacy that what is true for the short run must be true for the long run.
C. tendency to regularly misjudge in the present what you will do in the future.
D. tendency to misjudge how long it will take to accomplish a future task.
Answer: C
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The main goal of macroeconomic research is to
A) predict how the macroeconomy will perform in the future. B) analyze current macroeconomic data. C) develop new data that can be used to understand better the operation of the economy. D) make general statements about how the economy works.
When the profit-maximizing output level for a firm can be decided by setting output at the level where price is equal to marginal cost, the market structure is
a. perfect competition b. monopolistic competition c. duopoly d. monopoly e. oligopoly
The long-run average cost curve
a. is a composite of short-run AC curves. b. shows the lowest possible short-run AC corresponding to each output level. c. depends on the firm's planning horizon. d. All of the above are correct.
How does a monopsony benefit an employer?
a. Having no competition for sales increases revenues. b. The employer works together with other firms to set prices. c. The employer can increase profits by keeping wages low. d. Workers are paid above their marginal revenue product.