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:

Inventory Loan

A secured short-term loan to purchase inventory.

Cash Disbursement

The payment of money from a fund or account, typically involving the transfer of cash to individuals or companies for services rendered or goods purchased.

Operating Cycle

The period from purchasing inventory to collecting cash from the sale of that inventory.

Accounts Receivable Financing

A type of financing arrangement in which a company uses its receivables as collateral for a loan, effectively selling its right to future payments in exchange for immediate cash.