The tendency to deviate from sound long-run plans in the short-run is known as ________.
A)the failure of adaptive expectations
B)the failure of rational expectations
C)the time inconsistency problem
D)the NIMBY,or not in my backyard problem

Question

Quizplus · Accepted Answer

The time inconsistency problem refers to the tendency of individuals or policymakers to deviate from a sound long-run plan in the short-run. This occurs because of the inconsistency between their preferences over time, where they may prioritize short-term gains over long-term benefits. A and B are related to expectations formation, while D refers to opposition to development projects in one's area.

The Tendency to Deviate from Sound Long-Run Plans in the Short-Run