The Amount of Time It Takes a Given Policy Action

question 16

Multiple Choice

The amount of time it takes a given policy action to bring about a change in the state of the economy is called the:

• A) outside lag.
• B) inside lag.
• C) stabilization lag.
• D) external lag.

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Definitions:

Optional

Referring to a choice or discretion available in a process or decision, where participation or selection is not mandatory.

Receivable

An amount of money owed to a business by its customers or clients for goods or services provided on credit.

Hedging Instruments

Financial contracts used to offset potential losses or gains that may be incurred by an companion investment, effectively reducing risk.

Options

Financial derivatives that give the buyer the right, but not the obligation, to buy or sell an asset at a set price within a specific timeframe.