All of the Following Are Sources of the Impact Lag

question 49

Multiple Choice

All of the following are sources of the impact lag except

• A) it takes some time for the deposit multiplier process to work itself out.
• B) firms need some time to respond to the monetary policy with respect to their investment plans.
• C) it takes time for the Fed to formulate a policy that best addresses a problem in the economy.
• D) a monetary change is likely to affect the exchange rate, but that translates into a change in net exports only after some delay.

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Definitions:

Increase in Demand

A situation where there is a rise in consumer desire to purchase goods and services, often leading to higher prices and greater sales volumes.

Equilibrium Price

The price at which the quantity of a product offered is equal to the quantity of the product demanded, creating a balance without excess supply or demand.

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where market supply and demand are balanced.

Pepsi

A carbonated soft drink manufactured by PepsiCo, considered one of the most recognizable beverage brands worldwide.