Which of the Following Pairs of Lags Are Typically Shorter

question 105

Multiple Choice

Which of the following pairs of lags are typically shorter for monetary policy than for fiscal policy?

• A)The recognition lag and the implementation lag
• B)The effectiveness lag and the decision-making lag
• C)The decision-making lag and the implementation lag
• D)The implementation lag and the effectiveness lag
• E)The recognition lag and the effectiveness lag

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs — direct materials, direct labor, and both variable and fixed overhead — in the cost of a product.

Variable Costing

A costing method that includes only variable production costs in product cost calculations, used for internal decision-making.

Net Income

The excess of all revenues and gains over all expenses and losses for a specific period of time.

Production

The process of creating goods and services from various resources.