A major time consistency issue for monetary policy has to do with the trade-off between output growth and unemployment.

Question

Quizplus · Accepted Answer

The major time consistency issue for monetary policy is related to the trade-off between inflation and unemployment, not output growth and unemployment. Policymakers may want to stimulate the economy in the short term by lowering interest rates, which can lead to lower unemployment but higher inflation in the long term if not managed properly.

A Major Time Consistency Issue for Monetary Policy Has to Do