The Principal Reason That Monetary Policy Has Lags Is That

question 59

Multiple Choice

The principal reason that monetary policy has lags is that it takes a long time for

• A)changes in the money supply to change interest rates.
• B)the Fed to make changes in policy.
• C)changes in the interest rate to change aggregate demand.
• D)Congress and the President to approve Fed policy.

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Definitions:

Good Faith

The principle of honesty and fairness in dealings, implying a sincere intention without deception.

Negligent

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances, leading to unintended harm.

Instrument

A written legal document that formalizes an agreement or obligation between parties or is used to create a formal record.

Failure of Consideration

A situation where the promised exchange in a contract is not provided or fails to meet the agreed terms, potentially voiding the agreement.