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Time inconsistency is the problem of policy makers having a strong bias towards------ priorities
over the-------
A. long run, short run
B. monetary policy, fiscal policy
C. fiscal policy, monetary policy
D. short-run, long run
Solution
D.
time inconsistency: that sooner-occurring future intervals are valued more highly than later-
occurring future intervals, so the policy makers have strong bias towards short run over the long
run priorities.

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