In the last two decades, inflation has been relatively high in the U.S. economy, with the Consumer Price Index typically rising 10–12 percent per year

Which lag stems from the fact that it takes time for people and firms to react to a policy change, to acquire or reduce loans, and to change their level of consumption?

A) the implementation lag B) the recognition lag C) the market lag D) the impact lag

Refer to Figure 11-3. Which of the following would cause an economy to move from a point like A in the figure above to a point like B?

A) a technological regression B) a decrease in capital per hour worked C) an increase in capital per hour worked D) an improvement in technology