The Implementation Lag Is

question 9

Multiple Choice

The implementation lag is

• A)the time it takes for policy makers to obtain data indicating what is happening in the economy.
• B)the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy.
• C)the time it takes to pass legislation to implement a particular policy.
• D)the time it takes for policy makers to change policy instruments once they have decided on the new policy.
• E)the time it takes for the policy actually to have an impact on the economy.

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Definitions:

Price-to-earnings Ratios

A valuation metric that compares the market price of a stock to its per-share earnings, used to evaluate if a stock is over or undervalued.

Weak Form

A market efficiency hypothesis that suggests past prices and volumes have no effect on future prices, implying that past market data cannot be used to predict future market movements.

Efficient Market Hypothesis

A theory suggesting that at any given time, securities prices reflect all available information, meaning it's impossible to consistently achieve higher returns.

Superior Returns

Returns that exceed the performance of a benchmark index or the average returns of a particular investment category.