A Consequence of the Impact Lag Is That the Fed

question 14

Multiple Choice

A consequence of the impact lag is that the Fed

• A)may not know the impact of a change in policy.
• B)might not be able to correct a mistaken policy soon enough.
• C)may not have current information about the state of the economy.
• D)may see the impact of a change in policy on inflation, but not economic growth.

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Definitions:

Matter

Anything that occupies space.

Mass

A property of physical objects that measures the amount of matter in an object, affecting its resistance to acceleration under a force.

Occupies Space

A characteristic of matter that refers to the requirement of physical space for an object or substance to exist.

Conductor

A material that permits the flow of electric charges in one or more directions, such as metals.