Which of the Following Factors Mostly Determines the Lag Problem

question 27

Multiple Choice

Which of the following factors mostly determines the lag problem associated with monetary policy?

• A) the fact that business firms make investment plans far in advance
• B) the political system of checks and balances that slows down the process of determining monetary policy
• C) the time it takes for changes in government spending to affect the interest rate
• D) growth in the money supply is too slow

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Definitions:

Host Country

A nation where a corporation operates and maintains business activities outside its headquarters.

Authoritarian

A leadership style characterized by individual control over all decisions and little input from group members, often involving strict rules and regulations.

Expatriates

Employees who are temporarily or permanently living and working in a country other than their native country.