The existence of the time inconsistency problem in macro policy ...

[Mollykgkg]

The existence of the time inconsistency problem in macro policy suggests which of the following?
 
  A) Use fiscal and monetary policy to fine tune the economy.
  B) Reduce the independence of the central bank.
  C) Appoint someone who is more conservative (economically) than the rest of the government to head the central bank.
  D) Intervene frequently in the foreign exchange market.
  E) Eliminate rational expectations from econometric models used for forecasting.

Question 2

Refer to the information above. Given this information, the steady state rate of growth of output per worker is
 
  A) 0.
  B) 2.
  C) 3.
  D) 5.
  E) 16.

[BUTTHOL369]

Answer to Question 1

C

Answer to Question 2

C