Author Question: To solve the time inconsistency problem in macro policy, a nation may well have to A) restrict ... (Read 41 times)

strangeaffliction · **on:** Jun 30, 2018

To solve the time inconsistency problem in macro policy, a nation may well have to

A) restrict itself in the present from taking certain policy moves in the future.
B) lift all restrictions on future policy moves.
C) present policy moves to the public, for example, in a referendum.
D) use the courts to settle policy disputes.
E) make the central bank more responsive to the popular will.

Question 2

Assume that an economy experiences both positive population growth and technological progress. A reduction in the saving rate will cause

A) no change in K/NA.
B) a permanent reduction in the rate of growth of output per worker.
C) a permanent reduction in the rate of growth of output.
D) no change in Y/NA.
E) none of the above