Question

ANSWER TRUE OR FALSE

1) An independent central bank always gets to choose the country's inflation rate.

2) The issue of time inconsistency can be resolved through the use of constrained discretion

3) Governments would be wise to announce a no-negotiation policy with hostage-takers.

4) The Reserve Bank would be wise to fine tune its monetary policy actions so has to always hit its 2 percent inflation target.

5) When playing policy games, it is sometimes better for a policymaker to forgo some of the available options.

Answer 1

True. Central government has the right to fix inflation rate and make change whenever the market changed. The money supply have positive relationship with inflation rate. Thus central bank will determined the level of money in an economy. Thus inflation will be fixed and adjusted with respect to the market changes.  
False. Here the data are automatically marked by using the guards to code the segments to resolve the problem of inconsistency. These kind of data are very sensitive for different kind of violation.
True. Government will wisely and efficiently manage with the hostage takers. Otherwise the policy become inefficient and leads to violation of existing rules and regulations.  
True. Expansionary monetary policy will adjust and manage the inflation targets. The small and minute change in inflation can arranged and adopted through this inflation targeting mechanism of central bank.  
True. Adoption of proper measures by avoiding the existing resources by avoiding some available and not important methods. This will help to manage the policy more efficiently.