Time inconsistency refers to the:A) tendency for policies with high short-run benefits to have high long-run costs.B) fallacy that what is true for the short run must be true for the long run.C) tendency to regularly misjudge in the present what you will do in the future.D) tendency to misjudge how long it will take to accomplish a future task.

Question

Time inconsistency refers to the:A)  tendency for policies with high short-run benefits to have high long-run costs.B)  fallacy that what is true for the short run must be true for the long run.C)  tendency to regularly misjudge in the present what you will do in the future.D)  tendency to misjudge how long it will take to accomplish a future task.

Taylor Ploen · Accepted Answer

Final Answer : C, Explanation :  Time inconsistency refers to the tendency to regularly misjudge in the present what you will do in the future. This can lead to policies or decisions that are not optimal in the long run, as people may prioritize short-term benefits over long-term costs. Option A refers to a different concept known as the dynamic inconsistency problem. Option B is a generalization that is not specific to time inconsistency. Option D refers to a different type of cognitive bias known as the planning fallacy.

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