In General,the Longest Lag for

question 38

Multiple Choice

In general,the longest lag for

• A)both fiscal and monetary policy is the time it takes to change policy.
• B)both fiscal and monetary policy is the time it takes for policy to affect aggregate demand.
• C)monetary policy 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)fiscal policy 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:

Production

The process of creating goods or services using inputs such as labor, materials, and technology.

Spreading Effect

refers to the phenomenon where the impact of a particular event, policy, or action extends or disperses across a wider area or population.

Diminishing Returns

An axiom indicating that beyond a certain level, additional investments in a given domain will not yield proportionally higher returns unless other variables are adjusted.

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor directly involved in production.