Time-inconsistency problem

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Reference no: EM131388861

1. Describe the short run and long run equilibrium in a monopolistically competitive market.

2. An open market purchase of securities will always cause the equilibrium Fed Funds rate to fall.

True

False

3. The "time-inconsistency problem" is less likely to occur when the central bank announces its inflation targets.

True

False

Reference no: EM131388861

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