Of the Five Time Lags That Prevent a Discretionary Policy

question 47

Multiple Choice

Of the five time lags that prevent a discretionary policy from returning aggregate output to full employment instantaneously,two do not slow the effectiveness of monetary policy-the

• A)implementation and effectiveness lags.
• B)legislative and effectiveness lags.
• C)legislative and implementation lags.
• D)recognition and effectiveness lags.

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Definitions:

Sellers

Sellers are individuals or entities that offer goods or services in exchange for payment, playing a central role in market economies.

Market Situations

Various conditions or contexts in which buying and selling occur, affecting pricing and availability of goods and services.

Excise Tax

A tax applied to specific goods, services, or activities, either as a flat amount per unit or as a percentage of the price, used to raise revenue or discourage consumption.

Output

The total amount of goods or services produced by a business, industry, or economy within a specific period.