Those who argue that discretionary fiscal and monetary policies are "time inconsistent" advocate instead
A) fine-tuning.
B) policy activism.
C) governmental duplicity.
D) credible policies.
E) ongoing flexibility.

Question

Quizplus · Accepted Answer

Advocates for credible policies argue that discretionary fiscal and monetary policies are "time inconsistent," meaning that they may not be able to stick to their intended course of action in the face of changing economic conditions. Instead, they propose implementing policies that are credible and predictable, such as rules-based policies, to minimize uncertainty and increase the effectiveness of policy measures.

Those Who Argue That Discretionary Fiscal and Monetary Policies Are