Why Are There Significant Time Lags in Monetary Policy

question 65

Multiple Choice

Why are there significant time lags in monetary policy?

• A) Financial markets are inefficient and information takes several months to impact them.
• B) Changes in monetary policy only affect future projects such as factories,not current ones.
• C) Interest rates takes several months to change after a change in money supply.
• D) Interest rates are fixed and it takes several months to change laws to have the targets amended.
• E) Because of the Fed's relative inability to convince Congress about the necessity of a particular monetary policy.

Comprehend the dynamics of Earth’s atmospheric systems, including Hadley cells and the ENSO event.

Recognize and describe the occurrence and impact of the rain shadow effect.

Differentiate between various atmospheric gases and their roles in weather and climate, including greenhouse gases.

Understand the principles of upwelling and its ecological effects.

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Definitions:

Equity Method

An accounting technique used for recording investments in which the investor has significant influence over the investee, but not full control.

Straight Line Amortization

A method of allocation of an asset's cost over its useful life in equal annual amounts.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Non-Controlling Interest

A stake in a company that is not large enough to control company decisions, representing ownership by minority shareholders in a subsidiary not wholly owned by the parent.