In General, What Is the Longest Lag for Fiscal and Monetary

question 68

Multiple Choice

In general, what is the longest lag for fiscal and monetary policy?

• A) For both fiscal and monetary policy, it is the time it takes to change policy.
• B) For both fiscal and monetary policy, it is the time it takes for policy to affect aggregate demand.
• C) For monetary policy, it is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand.
• D) For fiscal policy, it is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand.

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Definitions:

Limited Exposure

The situation in which individuals or groups have restricted access to certain information, experiences, or resources.

Goal

A desired result or outcome that a person or organization aims to achieve.

Objective

A goal or target that is clearly defined and can be measured or evaluated.

Expectancy Theory

A theory in psychology that explains the motivational strength as being determined by the perceived likelihood of success and the value of the outcome.