Which of the Following Is True of Policy Lags

question 25

Multiple Choice

Which of the following is true of policy lags?

• A) Decision lags are generally longer for fiscal policy than for monetary policy
• B) Information lags are usually longer than implementation lags
• C) For monetary policy, the decision lag is usually longer than the information lag
• D) Altogether, policy lags generally take about 6 months
• E) Because they are predictable, implementation lags have no adverse consequences for policy making

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Definitions:

Resource Markets

Economic markets where the inputs for the production process (e.g., labor, land, capital) are bought and sold, determining factor prices based on supply and demand.

Income Distribution

How a nation’s total GDP is distributed amongst its population.

ATMs

Automated Teller Machines that allow customers to undertake financial transactions, notably cash withdrawals, without the need for a human clerk or bank teller.

Bank Tellers

Employees at financial institutions who deal directly with customers, handling routine banking transactions.