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:

Anticipatory Fear

Refers to the fear or anxiety felt in anticipation of a perceived threat.

Anxiety

A feeling of worry, nervousness, or unease, typically about an imminent event or something with an uncertain outcome.

Interpersonal Effectiveness

Refers to the ability to interact with others in a way that is both respectful and assertive, achieving desired outcomes.

80/20 Rule

Also known as the Pareto Principle, it is the idea that roughly 80% of effects come from 20% of causes.