Monetary policy is considered time-inconsistent because

Question

Accepted Answer

policymakers are tempted to pursue discretionary policy that is more expansionary in the short run.

Answer

policymakers are tempted to pursue discretionary policy that is more contractionary in the short run.

Answer

of the lag times associated with the implementation of monetary policy and its effect on the economy.

Answer

of the lag times associated with the recognition of a potential economic problem and the implementation of monetary policy.

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