Three Policy Lags Limit the Effectiveness of Monetary Policy: Recognition

question 47

Multiple Choice

Three policy lags limit the effectiveness of monetary policy: recognition lags,implementation lags,and impact lags.Of these three policy lags,fiscal policy is impacted by

• A) only implementation and impact lags.
• B) only recognition and implementation lags.
• C) only recognition and impact lags.
• D) all three policy lags.

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Definitions:

Optic Nerve

A crucial part of the eye and visual system, transmitting visual information from the retina to the brain.

Pupil

The adjustable opening in the center of the eye through which light enters, whose size is controlled by muscles in the iris.

Fovea

A small depression in the retina of the eye where visual acuity is highest, due to the concentration of cone cells.

Color Vision

The ability of the eye to distinguish objects based on the wavelengths of light they reflect, emit, or transmit.