Which of the Following Is Correct

question 168

Multiple Choice

Which of the following is correct?

• A)Policy lags are normally much shorter for fiscal policy than for monetary policy.
• B)Congress usually makes major fiscal policy changes in a fairly short period of time.
• C)Expenditure lags are much longer for investment, the main way in which monetary policy affects aggregate demand.
• D)Monetary policy affects aggregate demand more quickly than fiscal policy, such as tax or government spending changes.

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Definitions:

Opportunity Cost

Skipping over the possibility of gain from multiple options by deciding on a single one.

Opportunity Cost

The cost of choosing one option over alternative uses of resources or opportunities.

Inflation

A sustained increase in the general price level of goods and services in an economy over a period of time, leading to a decrease in the purchasing power of currency.

Government Policies

Government policies are the actions and strategies that governments implement to achieve specific objectives, including economic stability, growth, and social welfare.