The Impact Lag Facing the Fed Is

question 58

Multiple Choice

The impact lag facing the Fed is

• A)the delay before open market operations are able to affect the monetary base.
• B)the delay before the Fed's announcement of a new policy has an impact on the decisions of the public.
• C)the time required for monetary policy changes to affect output, employment, and prices.
• D)the delay before the impact of a recession on output and prices becomes clear to the Fed.

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Definitions:

Cash Inflows

The total amount of money received by a company or an individual, from various sources, over a period of time.

Internal Rate

Often referred to as the Internal Rate of Return (IRR), it’s the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Investment Proposals

Formal plans or suggestions put forward for consideration or discussion, especially one concerning financial investment.

Capital Budgeting

The process of planning and evaluating investments in long-term assets, focusing on projects that will generate future profits.