The concept of 'Dynamic Inconsistency' is most relevant for: MCQ with Answer and Explanation

The concept of 'Dynamic Inconsistency' is most relevant for:
A. Only trade policy
B. Only fiscal policy
C. Only labour market policy
D. The design of monetary policy rules versus discretion
Answer: Option D
Solution (By JKSSB Mock Tests)
Dynamic (or time) inconsistency problems are central to the debate on rules versus discretion in monetary policy, because policymakers may have an incentive to deviate from previously announced optimal policies.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is NOT a component of the Human Development Report published by UNDP?
A. Wholesale Price Index of India
B. Gender Inequality Index
C. Human Development Index
D. Multidimensional Poverty Index

Correct Answer: Option A


Explanation:
The Wholesale Price Index is an Indian domestic price index. The Human Development Report includes HDI, GII, MPI and other development-related indices.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Goods and Services Tax' Council chairperson is:
A. RBI Governor
B. Union Finance Minister
C. Prime Minister
D. President

Correct Answer: Option B


Explanation:
GST Council is chaired by the Union Finance Minister.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'Goods and Services Tax' on butter and ghee is:
A. 18%
B. 12%
C. 28%
D. 5%

Correct Answer: Option B


Explanation:
Butter and ghee attract 12% GST.

This question belongs to: Economy GK Economy Set 1