Which of the following is most consistent with the time-inconsistency problem?
A)while it is ten o'clock in the morning in Chicago,it will be eleven o'clock in New York City
B)a monetary policy action that is implemented in January will not begin to influence economic variables for several months
C)a parent who acquiesces to a child's demand just to keep them quiet in a public setting
D)an economic model with adaptive expectations

Question

Quizplus · Accepted Answer

The time-inconsistency problem is the tendency for people to change their minds about what is best for them as time passes. In this case, the parent is giving into the child's demand (which may not be in the child's best interest) just to keep them quiet in a public setting. This decision may bring immediate relief, but it is not consistent with the parent's long-term goals or values.

Which of the Following Is Most Consistent with the Time-Inconsistency