A credible nominal anchor
A) can help overcome the time-inconsistency problem by providing an expected constraint on discretionary policy.
B) can help to anchor inflation expectations, which leads to smaller fluctuations in inflation.
C) is required for a policy rule.
D) all of the above.
E) both A and B.
E
You might also like to view...
Refer to Figure 18-6. Which country has the more unequal distribution of income?
A) Syldavia B) Islandia C) They may have the same absolute income distribution although their relative income distribution is different. D) There is insufficient information to answer the question.
In the 1990s, Congress considered an agriculture bill that would gradually reduce price supports for many agricultural products. If the bill were to be approved, what would most likely happen to the number of families employed in agriculture?
A. It would decrease, because agricultural prices would fall. B. It would decrease, because agricultural prices would rise. C. It would increase, because agricultural prices would fall. D. It would increase, because agricultural prices would rise.