A Recognition Lag Is the Delay Between

question 119

Multiple Choice

A recognition lag is the delay between

• A) the demand for a product changing and its price changing.
• B) the onset of an economic slowdown and the realization that a discretionary fiscal policy response may be appropriate.
• C) the recognition of an increase in the cost of living and the appropriate adjustment to Canada Pension Plan (CPP)payments.
• D) increases in the unemployment rate and increases in university enrolment.
• E) changes to the price of gasoline and adjustments to the number of kilometres that drivers travel each month.

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Definitions:

Optimal Risky Portfolio

A collection of financial investments that has the highest expected return for a given level of risk.

Risk-Free Asset

An investment with a guaranteed return, with no risk of financial loss, typically represented by government bonds.

Harry Markowitz

He is an economist renowned for his pioneering work in portfolio theory, establishing the basis for modern portfolio management with his concepts of diversification and risk-return optimization.

Nobel Prize-Winning

Recognition awarded for outstanding contributions in fields like Physics, Chemistry, Medicine, Literature, Peace, and Economic Sciences.