Which of the Following Statements Is Correct Regarding the Lags

question 42

Multiple Choice

Which of the following statements is correct regarding the lags in fiscal and monetary policy?

• A) The inside lag is the time needed for monetary policy to be effective while the outside lag is the time needed for fiscal policy to be effective.
• B) The outside lag is the time needed for monetary policy to be effective while the inside lag is the time needed for fiscal policy to be effective.
• C) The lag for monetary policy is shorter than the lag for fiscal policy.
• D) The lag for fiscal policy is shorter than the lag for monetary policy.

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Definitions:

Significantly Distorted

Describes data or information that has been altered or misrepresented to such an extent that it significantly deviates from its original or true value.

Skew

An indicator of how much the probability distribution of a real-valued random variable deviates from being symmetrical.

Sigma

A symbol used in statistics to represent the standard deviation of a population or summing operations.

Sample Size

Refers to the number of individuals or observations included in a sample, which represents a subset of the larger population.