The Recognition Lag Refers to The

question 32

Multiple Choice

The recognition lag refers to the:

• A)time taken for changes in the money supply to be translated into changes in real GDP.
• B)time taken by policymakers to formulate an appropriate policy to solve an economic problem.
• C)time taken by policies to have an impact on the different macroeconomic variables.
• D)time taken by policymakers to recognize that an economic problem exists.
• E)natural difference between monetary policy timing and fiscal policy timing.

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Definitions:

Cash Cycle

The duration of time a company takes to convert its inventory and other resource inputs into cash flows from sales.

Inventory Period

The average time it takes for a company to turn its inventory into sales, often used to evaluate the efficiency of inventory management.

Accounts Payable Period

The average number of days it takes for a business to pay off its creditors and suppliers.

Receivables Turnover

A financial metric indicating how quickly a company collects payments from its customers, calculated as sales divided by accounts receivable.