The Principal Reason That Monetary Policy Has Lags Is That

question 28

Multiple Choice

The principal reason that monetary policy has lags is that it takes a long time for

• A)changes in the interest rate to change aggregate demand.
• B)changes in the money supply to change interest rates.
• C)the Fed to make changes in policy.
• D)Congress and the President to approve Fed policy.

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Definitions:

Chair

A piece of furniture consisting of a seat, legs, back, and sometimes armrests, for a single person.

Democratic

Pertaining to or characterized by principles of political democracy, indicating a system in which power is vested in the people through free and fair elections.

Buying Center

A group of individuals within an organization who are responsible for making decisions about which products or services the organization purchases.

Majority Vote

A decision-making process where the option receiving more than half of the votes is chosen or deemed accepted.