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Which of the Following Best Describes the Reason Why Policymakers

Question 42

Multiple Choice

Which of the following best describes the reason why policymakers do not generally like to commit to following a rule for monetary policy?


A) Because changes to the economy's structure will prevent any rule from working well for long
B) Because rules do not effectively prevent time-inconsistency
C) Because rules without credibility are worse than discretion
D) Because central bankers like to feel important

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