The situation in which policymakers have the incentive to announce one economic policy but then change that policy after citizens have acted on the initial state policy is known as
A)presidential politics.
B)liar's syndrome.
C)foregone credibility.
D)time inconsistency.
E)finesse reporting.

Question

Quizplus · Accepted Answer

This situation is known as time inconsistency, where policymakers may announce an economic policy to gain credibility with citizens, but later change the policy due to changing circumstances or the desire to pursue alternative goals. This can create distrust and uncertainty among citizens and undermines the effectiveness of economic policy.

The Situation in Which Policymakers Have the Incentive to Announce