Author Question: The government of Montesia had announced that it would keep its money supply unchanged in 2010 . ... (Read 15 times)

RRMR · **on:** Jun 30, 2018

The government of Montesia had announced that it would keep its money supply unchanged in 2010 . However, in 2011, the money supply increased, thereby ruining public expectations. This led to:
a. no problem; this is normal behavior.
b. policy credibility.
c. a time-inconsistency problem.
d. the development of rational expectations.
e. an anticipation about the monetary policy.

Question 2

An anti-inflation policy that involves announcing and executing tough measures to stop inflation is called _____.
a. cold turkey
b. red tape
c. a pork-barrel policy
d. chokehold
e. time-inconsistency